Shas chairman Eli Yishai announced on Sunday evening that his party's ministers will oppose the economic measures planned by the Israeli government. The measures, which include increasing the VAT and an across-the-board cut for government ministries, will be presented for Cabinet approval on Monday.
“Raising taxes will hurt thousands of families in Israel, who are already coping with the high cost of living,” said Yishai, adding that he will demand that a reduced VAT be imposed on basic goods such as water, electricity and bread.
Prime Minister Binyamin Netanyahu and Finance Minister Yuval Steinitz have been criticized for their economic measures, which will also include raising the income tax by 1% for individuals who earn between 5,200 shekels and 40,000 shekels per month and increasing the income tax paid by those who have a capital income of 800,000 shekels or more.
Earlier on Sunday, hospital managers and CEOs, heads of doctors’ unions and heads of patient welfare groups sent a letter to Netanyahu, urging him not to go through with a plan to cut the annual healthcare budget.
The Prime Minister’s Office (PMO) said in response that the cuts will not affect medically necessary staff and equipment, and will only affect the Health Ministry’s budget for administrative staff.
Steinitz defended the economic measures in an interview with Channel 2 News on Friday, saying, “For three and a half years we’ve been guarding Israel from the worst global economic crisis since its establishment. There is no mass unemployment here like in other countries. Why? Because we behave boldly and with fiscal responsibility.
“We must understand that if we do not act responsibly and wisely, what is happening in Spain and Greece will also happen here,” added Steinitz. “The Israeli economy is in relatively good shape compared to America and Europe. Our goal is to broadcast to the world that we will continue to maintain Israel's economy.”
He added, “I hope we won’t require further measures. We'll get billions from the foreign companies that operate in Israel. I take into account the credit rating agencies, and we are one of the few countries in the West whose credit rating hasn’t been lowered.”