The Knesset voted by a wide majority, 74-28, to pass the government\'s emergency economic cuts package last night. The program calls for cutting the national budget by more than 13 billion shekels, or about 6%. The cuts package also includes eliminating some regional income tax discounts, which, together with other aspects of the program, will be in effect for 18 months. Residents of Judea, Samaria, and Gaza, for instance, who currently enjoy a 7% benefittax break, will see it drop gradually to 5% by 2003; Be\'er Sheva will see a drop in their its tax break from 10% to 8%; Ashkelon and Omer - will drop from 3% to zero; some 15% areas in the north will be cut to 12%; and while the 20% and 25% benefits discounts in Dimona, Kiryat Shmonah, and elsewhere will not change. Value Added Tax will jump from 17% to 18% as of June 15, cigarette and gasoline taxes will climb, and government ministries and government services will share an across-the-board cut of 4%. National insurance payments and allowances will be cut by the same amount, though parents who have not served in the army will lose 24% of their child allowances. These measures will be in effect for 18 months.
At the initiative of MK Tzvi Hendel - of the opposition National Union-Yisrael Beiteinu party, which voted in favor of the cuts - a woman who has performed one year of national service will be considered to have served in the army, and her children\'s allowances will be cut only by 4%.
The differentiation between IDF veterans and non-veterans will mainly affect the Arabs and parts of the hareidi sector. The Likud, seeking a way to prevent large hareidi families from suffering a 24% cut, entertained the possibility yesterday of considering men whose army service totaled only a short period of basic training as having served in the army; many hareidim fit these criteria. However, the Knesset Legal Counsel opined that this would not stand up to Supreme Court review, as it would be considered discrimination - for Arabs are not called up for the army at all and would not be eligible for the reduced cuts.
As it is, MKs such as opposition leader Yossi Sarid of Meretz said that even the current bill, which \"discriminates\" equally against all those who have not served in the army, is discriminatory against Arabs. For this reason, too, MK Nawaf Masalha announced his resignation from the Labor Party, in protest of the party\'s vote for the bill.
At the initiative of MK Tzvi Hendel - of the opposition National Union-Yisrael Beiteinu party, which voted in favor of the cuts - a woman who has performed one year of national service will be considered to have served in the army, and her children\'s allowances will be cut only by 4%.
The differentiation between IDF veterans and non-veterans will mainly affect the Arabs and parts of the hareidi sector. The Likud, seeking a way to prevent large hareidi families from suffering a 24% cut, entertained the possibility yesterday of considering men whose army service totaled only a short period of basic training as having served in the army; many hareidim fit these criteria. However, the Knesset Legal Counsel opined that this would not stand up to Supreme Court review, as it would be considered discrimination - for Arabs are not called up for the army at all and would not be eligible for the reduced cuts.
As it is, MKs such as opposition leader Yossi Sarid of Meretz said that even the current bill, which \"discriminates\" equally against all those who have not served in the army, is discriminatory against Arabs. For this reason, too, MK Nawaf Masalha announced his resignation from the Labor Party, in protest of the party\'s vote for the bill.