Netanyahu: Israel Needs Taxes to Bolster Military, Economic Security

Responding to calls to lower taxes and increase spending, PM says those making such demands 'lack economic knowledge as well as responsibility,' at cabinet meeting marking three-year anniversary of formation of current Likud-led coalition.

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Prime Minister Benjamin Netanyahu rejected calls to lower taxes and increase government spending on Sunday, saying that his government was using tax money to safeguard Israel's security as well as its economy.

"We need the taxes to buy more Iron Domes, to complete the fence's construction, to pay for children's free education, to pave roads and lay train tracks, to aid the elderly and needy," the premier said.

Israel's Prime Minister Benjamin Netanyahu speaking at the weekly cabinet meeting in Jerusalem, Sunday, April 1, 2012. Credit: AP

On Saturday, as hundreds of protesters took to the streets of Tel Aviv, Netanyahu decided to raise the price of gasoline by only 5 agorot a liter, despite an expected 20 agorot increase.

The new prices that came into force at midnight on Saturday night mean a liter of 95-octane gas will now cost NIS 8 at full-service pumps and NIS 7.79 at self-service pumps.

The decision to moderate the rise in the price of gas will be achieved by cutting the excise tax on gasoline, and the budgetary shortfall will be covered by cutting spending and government jobs.

This is the second time in a month that Netanyahu has intervened to prevent gas prices from going over NIS 8 per liter. Like the last time, the announcement of Netanyahu's intervention also came a few minutes before the central 8 P.M. news broadcast.

The decision came after a lengthy meeting between Netanyahu and Finance Minister Yuval Steinitz. "The solution will make things easier for Israelis. The responsible solution will ensure continued economic growth and the lowest unemployment since 1983," Netanyahu said.

Addressing growing pressure over the cost of living in Israel – a pressure which resulted in the break out massive social protests last summer – Netanyahu on Sunday rejected calls to cut taxes and increase spending, saying that those making such demands "lack economic knowledge as well as responsibility."

Netanyahu said that the number of Israeli poor "dropped for the first time in years because we invested in the elderly and encouraged Haredi and Arabs to join the workforce."

The premier, speaking at a weekly cabinet meeting marking three years since the formation of his Likud-led coalition, called his government the most "stable in the last 20 years," adding that it was a government that "does a lot."

"Israeli citizens feel safer because of the government's assertive security policy. They feel safer because of the massive budgets we invest in bolstering the home front, specifically the acquisition of Iron Dome batteries," Netanyahu said, also citing ongoing work on Israel's new barrier along its border with Egypt along with "pther activities we undertake to enhance security."

The PM said Israelis felt that "the State of Israel and its economy are more stable. We've operated well in the face of the global financial crisis. The economy here is growing despite the global crisis and unemployment is at its lowest since 1983."

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