More austerity suffering for Israeli people

This video is called The Poverty in Israel.

By Jean Shaoul:

Israeli cabinet reveals draconian austerity budget

3 August 2012

Israel’s cabinet has approved austerity measures aimed at increasing taxes by NIS13 billion ($3.25 billion) and slashing state expenditure by NIS12 billion ($3 billion).

Its targets for lower budget deficits after 2013 guarantee even harsher measures in the next few years. The budget, to be discussed in parliament in October, is expected to be opposed by some of Prime Minister Benyamin Netanyahu’s coalition partners, particularly the religious parties, whose supporters are desperately poor and depend on Israel’s already inadequate social safety net.

The budget will hit both middle- and low-income families, while exempting the super-rich.

VAT (a sales tax) will rise from 16 to 17 percent. Finance Minister Yuval Steinitz ordered an immediate tax hike on cigarettes and beer. As it is, revenues from indirect taxes, which affect the poorest the most, are higher than direct taxes on income and higher than in most other Organisation for Economic Co-operation and Development (OECD) countries.

Income tax rates for those earning more than the average wage (NIS8,881, or $2,220 a month) will rise by 1 percent, and by 2 percent on higher earners (NIS67,000 or $17,000 a month). Such is the enormous inequality that just one quarter of wage earners are paid more than the average. To put this in perspective, the tax cuts for the rich introduced in 2003 have led to a cumulative loss of more than NIS40 billion ($10 billion). The top rate of tax will remain unchanged at 48 percent.

All government departments except defence, education and housing, face cuts of at least 5 percent.

Following the social protests last summer, the Trajtenberg Commission recommended free education for all from the age of three, to be funded out of a NIS2.5 billion ($625 million) cut in defence. But the government has increased defence spending, not cut it. Now the funding for education will come from cuts to the rest of social services.

6 thoughts on “More austerity suffering for Israeli people

  1. Dispute re-declared on Israeli airlines as “open skies” agreement signed

    On Tuesday, the Histadrut trade union federation renewed an industrial dispute it declared in February involving the El Al, Arkia’ and Yisrair airlines.

    The renewal of the dispute follows Monday’s signing of the “open skies” agreement by the government.

    It is feared that due to the removal of limits on flights to Israel by foreign carriers, fewer flights will be available for domestic carriers resulting in a loss of jobs.


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  4. Israel: Maariv staff protest and Haaretz employees begin open-ended strike

    Staff at the Hebrew language daily Maariv burned tires and chanted slogans outside the newspaper’s office building in Tel Aviv Tuesday to protest work conditions, unpaid wages and job threats.

    According to the Times of Israel, “Two thousand employees are set to be laid off as part of the company’s austerity measures. In addition, workers’ representatives reported that some employees did not receive August salaries. Workers said they feared the company would default on their pension payments.”

    Attempts at a corporate purchase of the paper have hit obstacles and Maariv’s financial situation was revealed as worse than previously thought, leading to doubts that the September payroll could be paid.

    Staff at Haaretz started an open-ended strike Tuesday, after management refused to disclose details of planned cuts and austerity measures to rescue the struggling newspaper. On Tuesday morning, hundreds of employees staged a protest demanding that executives put together an emergency plan to increase revenue.

    Reporters have said they will not hold interviews or write news stories, and photographers will not be sending photographs to the news desk. Haaretz is the country’s oldest newspaper, founded in 1918.


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