Finance Minister Lieberman Pushes Back Against ultra-Orthodox Over Subsidy Cuts

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Finance Minister Avigdor Lieberman at a Yisrael Beiteinu faction meeting in the Knesset, in May.
Finance Minister Avigdor Lieberman at a Yisrael Beiteinu faction meeting in the Knesset, in May. Credit: Emil Salman

Finance Minister Avigdor Lieberman rejected the harsh criticism levelled at him for his decision to require that both parents work in order to receive subsidized day care as of September – a change that will lead to the end of such subsidies for 18,000 families of older Haredi yeshiva students.

“We didn’t invent the wheel,” said Lieberman in a special press conference with senior Finance Ministry officials in preparation for the two-year state budget for 2021 and 2022. “I heard all the screams about the robbed Cossack,” he said, referring to the adage of a thief who accuses others of wrongdoing. “But we’ve already done it twice. Former Prime Minister Benjamin Netanyahu did it in 2003 and in 2013 as well. We saw that it sent employment climbing 70 percent in the following year. These are steps that have proved themselves and the experience has accumulated.”

He also lashed out at the ultra-Orthodox Knesset members who attacked him for his decision. “Those who are harming the Haredi community are the MKs of Shas and United Torah Judaism. They want to leave the entire Haredi public without a living, so that they will remain dependent on handouts and financial assistance all their lives.”

He continued, “Shas and United Torah Judaism’s strongest opposition is to core studies. Because an 18-year-old boy who has never learned math, English and computers has just one track to the yeshiva, with no other options. At age 18, some of them don’t know their multiplication tables. This is the most sacred thing as far as they’re concerned – to prevent them from being educated. Our goal is to bring the Haredi community out of poverty.”

Lieberman repeated his promises not to raise taxes and or make budget cuts in the short term, even though he intends to increase government spending on various matters, such as extending compulsory military service.

Lieberman presented a particularly ambitious target: “A dramatic change in regulation, according to the plan we presented with the prime minister, is supposed to bring in about 7.5 billion shekels ($2.3 billion) a year. If we maintain [economic] growth of 5 percent a year, it will definitely be an exceptional accomplishment.” At the same time, Lieberman and his ministry officials declined to provide details about the deficit target for next year’s state budget.

He justified his decision to extend compulsory IDF service, despite previous agreements not to do so. “As defense minister, I declared that I opposed shortening service. A defense establishment based on autopilot must deal with threats. It’s not just that threats aren’t vanishing, they are rising.”

Lieberman presented the timetable for the passage of the 2021-2022 budget: cabinet approval at the beginning of August, passing its first reading in the Knesset at the beginning of September and final approval of the budget in November. In the coming weeks, Lieberman said, other matters will be added to the budget.

Lieberman said that his goal is to “Get the treasury back to normal. The last budget was approved somewhere in March 2018. Preparing budgets and leading reforms is the day-to-day business of the Finance Ministry.”

He also commented on rising real estate prices, saying that a lack of land to build on is at the core of the crisis, and that “cheap money” is fueling it as well. “In the past few months there was an all-time high in taking out mortgages. We must free the land market. Any attempt to lower real estate prices won’t work. The only solution is to increase the supply.”

The new director general of the Finance Ministry, Ram Belnikov, added that the ministry’s goal is to exceed the number of housing starts included in the coalition agreement – 300,000 – in the next five years. He refused to state if he will act to reduce prices, and said: “We want to reach a balance between supply and demand, and close the margins in inventory. It would be silly to set a target for prices.”

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