The government\'s controversial economic cutback program passed in the Cabinet last night, after several of the more austere and opposition-evoking measures were removed. Arutz-7\'s Ariel Kahane reports that tax benefits for residents of the Negev, the north, and Yesha were halved, and child-allowances will be cut for those who have not served in the army. The wage-freeze idea was retracted, however, and the cut in child allowances for non-army veterans will be smaller than planned. Value Added Tax on goods and services will be increased from 17% to 18%, water prices will be raised, unemployment payments will be decreased, and government ministry budgets will be uniformly cut.
Despite the approximate 2-1 margin of government support for the plan last night, many sectors and political bodies are quite adamant in their opposition. The Histadrut Labor Union has declared an official work dispute, the truckers are up in arms, and even northern-border residents plan to strike, Shlomi Mayor Gabi Naaman says, if their benefits are not restored. \"There is one \'plus,\' if you can call it that,\" Kahane noted, \"and that is that private employers who add employees to their businesses will receive a special National Insurance grant, as a way of \'encouraging renewed economic growth.\'\"
The budget-battle now moves to the Knesset, which must also approve the new program. The first Parliamentary front will be in the Knesset Finance Committee - headed by United Torah Judaism MK Yaakov Litzman. His party is adamantly against the child-allowance cut, and Litzman is therefore not likely to place the matter on the agenda in the near future. His party colleague MK Moshe Gafni explained to Arutz-7\'s Haggai Seri today, \"I am in favor of a plan of cutbacks, because there is truly no other choice - but there are some things that we simply cannot accept. Just three months ago, Israel\'s large families were made to suffer other cuts, so [it\'s not fair to] cut them again - not to mention the other measures that will also affect them…\"
Shas, too, will vote against the program because of the child-allowance clause; Shas leader Rabbi Ovadiah Yosef so instructed his MKs, \"even at the expense of toppling the government.\" Many of the plan\'s opponents say that cutbacks should begin in the government itself, where there are over a dozen deputy ministers and several Ministers Without Portfolio. They acknowledge, however, that these senior officials will take a 5% pay drop in the framework of the current proposals.
Despite the approximate 2-1 margin of government support for the plan last night, many sectors and political bodies are quite adamant in their opposition. The Histadrut Labor Union has declared an official work dispute, the truckers are up in arms, and even northern-border residents plan to strike, Shlomi Mayor Gabi Naaman says, if their benefits are not restored. \"There is one \'plus,\' if you can call it that,\" Kahane noted, \"and that is that private employers who add employees to their businesses will receive a special National Insurance grant, as a way of \'encouraging renewed economic growth.\'\"
The budget-battle now moves to the Knesset, which must also approve the new program. The first Parliamentary front will be in the Knesset Finance Committee - headed by United Torah Judaism MK Yaakov Litzman. His party is adamantly against the child-allowance cut, and Litzman is therefore not likely to place the matter on the agenda in the near future. His party colleague MK Moshe Gafni explained to Arutz-7\'s Haggai Seri today, \"I am in favor of a plan of cutbacks, because there is truly no other choice - but there are some things that we simply cannot accept. Just three months ago, Israel\'s large families were made to suffer other cuts, so [it\'s not fair to] cut them again - not to mention the other measures that will also affect them…\"
Shas, too, will vote against the program because of the child-allowance clause; Shas leader Rabbi Ovadiah Yosef so instructed his MKs, \"even at the expense of toppling the government.\" Many of the plan\'s opponents say that cutbacks should begin in the government itself, where there are over a dozen deputy ministers and several Ministers Without Portfolio. They acknowledge, however, that these senior officials will take a 5% pay drop in the framework of the current proposals.