Efforts to get ultra-Orthodox men and Arab women to join the workforce by reducing entitlements needs to be done gradually and with appropriate training, Bank of Israel Governor Stanley Fischer told Finance Minister Yair Lapid in a recent meeting, according to a source close to the situation.
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Also at the meeting to discuss the 2013-14 budget and Economic Arrangements Law were senior ministry officials and Fischer's deputy, Karnit Flug. According to the source, Fischer and Flug said faulty planning would lead to a "crisis like a collapsing house of cards."
They said mistakes would actually deepen poverty in the Haredi and Israeli Arab communities, foster mistrust of the bureaucracy and impair the financing of social services.
Fischer and Flug added that job training without adequate employment opportunities would undermine the goal of encouraging Arab women and ultra-Orthodox men to work. Fischer said the government must convince these groups to get training and seek employment, but they also need adequate preschools for their children.
Last week, Lapid told Fischer and Prime Minister Benjamin Netanyahu that he planned to cut around NIS 26 billion from the 2013-14 budget. About NIS 9 billion of that would take place in the last five months of this year, when the draft budget is finally in force, with the rest coming in 2014.
Lapid’s austerity plan also includes tax hikes to raise some NIS 5 billion in the second half of this year and between NIS 12 billion and NIS 14 million in 2014.