Lapid and Netanyahu agree to cuts in security, child allowances and the public sector

The “Yedioth Ahronoth” newspaper headlined its Monday morning issue with the agreement made by Israeli President, Benjamin Netanyahu, and Minister of Finance, Yair Lapid, to make a series of cuts in Israel’s security budget, child allowances and public sector benefits.

According to the newspaper, one week after taking office, Lapid asked ministry officials and department heads to submit proposals to decrease the deficit in the budget which has now reached NIS 40 billion.

The newspaper also reported that Lapid accused the former government of deceiving the people and that the real condition of the Treasury does not reflect government statements asserting the excellence of the economy.

The newspaper added that Lapid and Netanyahu have agreed on 3 cuts; a cut of NIS 4-5 billion from the security budget, NIS 3.5 billion from child allowances, and NIS 3 billion from public sector employee benefits.

Moreover, the newspaper reported that a number of other cuts are being studies, including cancelling the value added tax exemption in Eilat, raising VAT to 18 per cent, raising company taxes by 1 per cent and cracking down on implementing the law on income tax.

The proposal is expected to be submitted to Netanyahu for approval after “the Hebrew Easter”.

Furthermore, yesterday the Bank of Israel announced that the interest rates will remain the same for the next couple of months. It also announced that the unemployment rate has risen from 6.5 per cent last February, to 6.7 per cent. In addition to this, only 77 per cent of Israelis work full-time.

An announcement of a decrease in fuel prices by 30 Agora per litre, making the cost of 1 litre of gasoline NIS 7.55-7.65, is also expected. This is a result of the global drop in the prices of refined gasoline and petroleum.