Israeli Finance Minister Yair Lapid has warned that allowing Israel’s deficit to grow would “bury” the country, Globes reported Tuesday.
“We must make changes together. We must do this in two stages. The first, and short, step is to emerge from the deficit. The steps we’ve taken are painful, I admit it. Raising VAT is painful, raising income tax is painful, but you are people who understand budgets, so it is easy for me to explain this to you: the deficit is not a one-time event, it’s structural. If we don’t stop it now, it will continue to grow and grow until it buries us,” Lapid said in his opening remarks at the Union of Local Authorities in Israel.
“If we don’t take all these loathsome measures now, next year, in 2014, the budget hole would grow to NIS 62.2 billion, and in 2015 it would exceed NIS 70 billion. This means collapse, and it is my job to protect the country from collapse. People complain about taxes and they are right, but the worst blow to a person is the loss of his or her job, and this is what we have prevented.”
Lapid said that the measures he has taken have prevented Israel from experiencing the same economic conditions as in Europe. “25% of young people in the bloc are unemployed. More than 50% of young people in Spain are unemployed, and almost 60% of young people in Greece. That is what we have prevented.”
“Our real test is our ability to work together. This test rests on three pillars. The first pillar is jobs. Israel’s unemployment rate is low, less than 7%, but it is artificially low. It is low because we have entire communities, especially haredi (ultra-orthodox) men and Arab women, who are simply not part of the equation. They are not recorded as unemployed because they are not even looking for work. We’re now changing this.”
Lapid also laid out his vision for strengthening Israel’s economy through a mix of hi-tech know-how, cultivating small businesses, and attracting corporations from overseas.
“The format of equal sharing of the burden, together with the national job training plan which we are now building with the Ministry of the Economy, will change the Israeli labor market. We will train people to work in high tech and industry, and we will support local ventures and small businesses, we’ll strengthen regional industrial zones in the north and the south, and will give tax breaks to every multinational which will establish development centers and factories here, creating jobs and which will put us at the forefront of global technology and innovation.”