Knesset to Hold Emergency Session on Lapid’s Austerity Budget

YERUSHALAYIM

The storm over the coming austerity budget continues to gather as the Knesset announced it will be holding an emergency discussion, and more voices were raised in opposition to proposed cutbacks.

The Knesset will convene despite the seasonal recess to discuss the 2013 budget and inaccurate statements about the middle class by Finance Minister Yair Lapid which have caused a furor.

Labor Party chairman Isaac Herzog gathered the requisite 50 signatures Tuesday to call the MKs in from vacation, though a date hasn’t been set for it yet.

Lapid has been paying a high price for his gaffe on Monday, in which he described a couple who earn 20,000 shekels per month to support their three children as middle class, a figure at odds with accepted income classifications.

Perhaps the most virulent critic has been Meretz leader Zehava Gal-On, who accused Lapid of surrounding himself with right-wing advisers that want to destroy the welfare state and benefit the rich.

“Lapid knows how to use new media and talks about new politics, but names like Uri Yogev, who he is considering appointing as Finance Ministry director-general, are the oldest politics possible,” Gal-On said.

“Yogev and the other economists surrounding Lapid are directly responsible for the dramatic rise in inequality in the last 10 years and the continued hardship on the middle class.”

Yesh Atid MK Ofer Shelah defended Lapid, saying the finance minister was simply trying to explain the economic problems in real rather than abstract terms.

“People can cling to one detail or another, but what’s important is to remember that this is a discussion of everyone’s future and quality of life,” Shelah told Army Radio.

Meanwhile, the Council for the Child denounced reports of planned cuts in child allotments, warning that it will increase the number of children below the poverty line, The Jerusalem Post reported on Wednesday.

Dr. Yitzhak Kadman, executive director of the Council for the Child, noted that cutting the allowances, paid monthly to Israeli families by the National Insurance Institute, would also cause “a drastic deterioration in the situation of children already living below the poverty line, and also severely harm children in families where parents work and are underpaid.”

In a letter explaining the purpose of the allowances, Kadman stated that they are “not a free gift, but a minimal expression of consideration” for the cost of raising families.

“There is no country in the Western world where a fine is imposed on raising children,” he wrote. “There is no country in the Western world in which family size is not addressed financially at all income levels.”

Kadman added that child subsidies in most Western nations were increasing significantly compared to that in Israel.

On another contentious issue, the Israel Society for Family Medicine on Tuesday issued a statement denouncing the government’s reported intention of imposing a value-added tax (VAT) on fresh produce. The doctors warned that adding a 17 percent (or an eventual 18%, if it is raised) tax would cause serious, long-term harm to public health, The Jerusalem Post reported.

Lower socioeconomic groups would suffer most because they would not be able to afford fresh fruit and vegetables, they said.

Finance Ministry officials have sought to cancel the VAT exemption on fresh produce for almost 20 years to increase government revenues. It recently dusted off the proposal of VAT on produce as a trial balloon while Finance Minister Yair Lapid and Health Minister Yael German (Yesh Atid) are still new on the job.

But the society argues that forcing people to eat cheap food such as white sugar and flour, instead of nutritious foods like fruits and vegetables, will not be cost-effective, since in the long term the cost to the state of treating diseases will far exceed any short-term revenue gains.

Asked to comment, the Health Ministry said that German is busy day and night studying the issues and will soon comment on the VAT proposal.

Director-general of the ministry, Prof. Ronni Gamzu, is already on the record against a VAT on fresh produce, voicing his opposition a few years ago, when the Treasury previously stated that it was on the drawing board.

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