Finance Minister Yuval Steinitz
Finance Minister Yuval Steinitz Israel news photo: Flash 90

The Finance Ministry, along with Prime Minister Binyamin Netanyahu, got a very unpleasant surprise Sunday: According to figures assembled by the Accountant General's Office, Israel's budget deficit was double than what had been expected. Instead of the 2% that Israel had been thought to be in “overdraft,” it turns out that the deficit is 4.2%.

In a statement, the Treasury said that most of the unexpected deficit, about NIS 18 million, was due to lower than expected tax receipts. Spending overruns accounted for only NIS 2.2 billion of the deficit.

Netanyahu's political rivals immediately jumped on the data to attack the Prime Minister. According to Tzipi Livni, “Netanyahu insists on running the economy according to old and outmoded rules that have failed around the world. Now it is clear that pressing the middle class with unjust and unbearable taxes not only did not help the public treasury, but actually hurt it. It is time for a government with a new order, economic and political, that will set a new national agenda,” Livni said, referring to her Hatnua party.

Yesh Atid's Yair Lapid also had some choice comments for the Prime Minister. “Netanyahu's and Finance Minister Yuval Steinitz's economic policies are collapsing before our eyes,” he said. “Netanyahu made the mistake of thinking that constantly raising taxes on the middle class would solve his deficit problem, but instead those additional taxes are just choking the Israeli economy. We at Yesh Atid have a different plan: Before we impose additional choking taxes on the public, we will cut spending on the Hareidim and settlements, and on the wasteful government. We will not allow taxes to be raised on the middle class,” Lapid added.