BICOM

Israel’s cabinet is set to today approve proposals set out by Finance Minister Yair Lapid for the 2013 and 2014 state budget. His plans, which were publicised last week, have been subjected to public and media criticism, prompting a set of street demonstrations on Saturday evening.

Lapid’s plans include a 1.5 per cent rise in income tax across all tax brackets from 2014. Among the other planned measures are reduced child allowances, a one per cent rise in VAT and a reduction in expenses in all government ministries. In total, state spending will be reduced by £4.5billion between August 2013 and the end of 2014. Lapid has been accused of letting down the very middle class voters he courted during January’s election campaign and it is estimated that between 10-15,000 Israelis took to the streets on Saturday night to protest against the plan. Labour MK Stav Shaffir, one of the leaders of the 2011 social protests, called the weekend demonstrations “fiercer, more political” than the wave of protests two years ago.

Nonetheless, the cabinet is expected to endorse Lapid’s plan this morning. The security cabinet met throughout yesterday to discuss proposed cuts in defence spending which are integral to the budgetary proposal. Economy and Trade Minister, Jewish Home leader Naftali Bennett said that the Defence Ministry would have to share in the budget cuts while Lapid’s predecessor at the Finance Ministry Yuval Steinitz said “there’s no choice” but to cut the security budget. Lapid has warned that if defence cuts are not made, then savings will be necessary elsewhere. Most ministers are set to approve the budget, although Environment Protection Minister Amir Peretz and Tourism Minister Uzi Landau have indicated that they may vote against it. If approved today, the budget will be presented to the Knesset, where it is likely to face further opposition.