Netanyahu moves to freeze Lapid's flagship legislation
Lapid vowed to work for middle class, putting forth bill intended to help young couples buy a home – however fight with Netanyahu, Ya'alon over defense budget has put bill on hold, could force Lapid out of gov't.
The mounting tension between Finance Minister Yair Lapid and Prime Minister Benjamin Netanyahu seemed to have reached new heights Monday evening when Netanyahu ordered his party whip to de facto put Lapid's flagship legislation on hold.
Netanyahu asked MK Yariv Levin, head of the Knesset Committee, not to convene the committee to discuss Lapid's 0% VAT bill, effectively preventing the bill from continuing through the legislation process, Channel 10's Nadav Perry reported.
The bill is supposed to exempt young couples from VAT when they purchase their first home. Lack of affordable housing is considered one of the central issues facing Israel's middle class, Lapid's main constituency.
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Lapid did not respond to the news, but a source from his Yesh Atid party said the move is "a retreat from coalition agreements. If the bill is indeed frozen this will lead to a serious crisis in the coalition."
At odds
The relationship between Lapid and Netanyahu has been strained as of late as the government moves to formulate Israel's 2015 budget. Netanyahu and Defense Minister Moshe Ya'alon have been fighting for a big hike in defense spending against fierce resistance from Lapid. While Lapid refuses to raise taxes and prefers to increase the deficit, Netanyahu prefers the former, saying an increase deficit is the wrong way to go.
Earlier Monday, Netanyahu called for an increase in defense spending, saying "There is no leader who… would not allow or demand a significant increase in the defense budget to counter security challenges."
Lapid told Ynet Saturday that he is sure "We can reach an understanding regarding the budget."
Elaborating on his claim, Lapid said "on the one hand we need to give the combative forces extra funding, and prepare the IDF for future challenges, but we also need to take into consideration the needs of Israeli citizens and add funding to social issues. Therefore there is no way we can raise taxes and further burden our citizens.
"By not raising taxes we make life easier and foster economic growth and help the market," he said.
The Bank of Israel has said its 2014 economic growth forecast of 2.9 percent could be hit by as much as half a percentage point by the fighting, which ended on Aug. 26.
"We see importance in preserving the spending framework," said Yael Andorn, Director-General of the Finance Ministry, in a statement.
"The budget ... reflects the right balances between the budget deficit, demands from the Defense Ministry and the civilian economic agenda," she said, echoing claims made by Lapid Saturday.
Earlier Saturday, Lapid's deputy and chairman of the Yesh Atid faction, MK Ofer Shelah, said that Netanyahu's behavior surrounding the looming 2015 budget could lead Israel to an early election.
The budget must be approved by the Knesset by the end of March or new elections will need to be called.
Moran Azulay, Attila Somfalvi, Reuters and AFP contributed to this report
