Opposition welcomes Lapid's plan to soften budget cuts

Leaders of Labor, Mererz and Shas praise finance minister for his plans to reduce budget cuts by NIS 6.5 billion at deficit's expense

Moran Azulay|Published: 05.02.13 , 13:10

For the first time since he took office, Finance Minister Yair Lapid is gaining praise from his rivals in the opposition. On Wednesday, it was reported that Lapid is set to soften the proposed economic measures and reduce budget cuts by NIS 6.5 billion.

Opposition Chairwoman Shelly Yachimovich welcomed the move and said Thursday, "For the first time since he took office Lapid is taking the right step."

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Lapid is set to present his budget cut plan on Sunday. It is expected the budget will be cut by NIS 6.5 billion and not NIS 13 billion as originally planned.

Yachimovich endorsed the plan explaining that "even the European Union has become skeptical of the austerity policy and voices around the world are calling for steps to revitalize the economy instead of stifling it."

The Labor chairwoman called on the government to introduce a package of incentives that will generate more growth. "The finance minister must not forget that the single most important agent of growth is the middle class and hurting it by raising taxes, eroding its salary and cutting health and education expenses is the same as hurting the economy and the state."

However, Lapid's plan applies only to the 2013 budget and the government intends to stick to its strict cuts for 2014. It is expected that defense costs, railway and road construction and child stipends will each lose NIS 3-4 billion.

The salaries of public servants will be cut by NIS 2-3 billion. An additional NIS 4-5B will be cut from smaller items in the state budget.

Shas' Aryeh Deri joined Yachimovich in backing Lapid's plan. "The government will have our full support in any sensible decision it makes and yet we shall still fight those cuts that are still being planned."

MK Zahava Gal-On said, "Lapid made the right decision and bought social services another year by means of resuscitative measures."

She further added, "One can't close the huge deficit Netanyahu has created in the past four years without making vital cuts and destroying what's left of Israel's social services. The new deficit target is a direct result of Netanyahu's irresponsible policy of cutting taxes."

"In order to restore Israel's welfare policy, reduce inequality and reach economic stability we must build a new outline of raising taxes on higher incomes, raising corporate tax and revoking the corporations' tax exemptions."