Lapid: Budget to affect all sectors, not only working class
Finance minister addresses impending austerity measures in press conference with Histadrut chairman; insists cuts will affect all sectors of Israeli society, not only middle class
The finance minister addressed the agreement with the Histadrut, saying that the agreement prevented a strike that could have cost the State some NIS 2 billion (some $56 million). "If a strike were to take effect, we would have lost more," he said.
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"Leadership means responsibility, and responsibility means doing the unpopular thing – which is the right thing. The right thing hurts the working man, but for the first time, the working man is not the only one who suffers."
Lapid at press conference (Photo: Ohad Zwigenberg)
Lapid insisted that though he had previously pledged not to raise the taxes of the middle class, his plan is the first to introduce budget cuts that will affect all sectors of Israeli society: "The problem in this country is that they always turned to the middle class, but I approached the pockets of other sectors as well, including big corporations."
"It used to be that with every economic problem only one pocket would be tapped, while other sectors would be spared. Now there is an equal share of the burden in more ways than one.
"We taxed the rich as well, we raised the corporate tax and we cut MK and minister salaries."
"The cuts also focused on groups considered untouchable until now. We completely changed the distribution of economic burden."
Regarding the proposed budget, according to which austerity measures are expected to come into effect, Lapid added: "Everyone wants someone else to pick up the bill for the State's deficit, but there are no miracles in these types of things.
"I will not hand out money the State does not have; we will not be Greece, not on my watch." Lapid added that he had gained the support and cooperation of the prime minister and the defense establishment.
Lapid, Eini (Photo: Ohad Zwigenberg)
Eini praised Lapid and said that he "exhibited extreme sensitivity," adding that "there is no doubt that tax hikes will exert a toll on the lower and middle class, but I hope we will be able to improve their situation."
Regarding the agreement his office made with the treasury, the Histadrut chair said "This was one of the hardest negotiations I have ever been a part of… the country is undergoing a severe crisis, no one disputes that, and the working class, some eight million families, understood it to must take some of the burden and help Israeli economy.
"I hope these moves will lead to growth and when that happens many problems will be resolved."
According to the agreement, a 1% pay increase promised to the public sector which was supposed to come into effect in July will be postponed to 2015, with the exception of contract workers.
In addition, improved conditions promised to contract workers will come into effect in 2013. Moreover, the State will reduce the number of such workers.
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