Israeli Prime Minister Benjamin Netanyahu, center, heads a weekly cabinet meeting at his al-Quds (Jerusalem) office (File Photo)
Israeli cabinet is preparing to vote on a package of tough economic austerity measures in spite of mass street protests against Tel Aviv’s economic policies and high cost of living.
Despite Israeli Prime Minister Benjamin Netanyahu’s boasting about how Tel Aviv has avoided the fiscal fate of Spain and Greece, the cabinet will vote on an austerity package to overcome the budget deficit on Monday.
The plan, which calls for a hike in income tax and value added tax (VAT), is expected to hit the underprivileged hard.
It also calls for a 700 million shekel (USD171 million) cut to Israel’s 2012 budget and a combined 700-million-shekel ($171 million, 140 million euro) cut from the budgets of all ministries with the exception of defense, education and welfare.
Israeli prime minister described the measures ''tough but necessary'' ahead of the cabinet meeting. Analysts, however, say the measure will give Israel's central bank room to resume monetary easing to support a weakening economy.
But these could only be the beginning. Tel Aviv wants an additional series of tax rises for 2013.
The saved money will be used to build a security fence along Egypt border and to acquire "new weapons and defense systems to cope with new threats," Netanyahu said last week.
Israelis have held several protest demonstrations since July 14, the first anniversary of protests against social injustice and high costs of living that swept Israel last summer.
Since then, at least three Israelis have set themselves on fire and several others attempted self-immolation to protest against Tel Aviv’s economic policies.
Moshe Silman, 57, died of his burn wounds on July 20 after fighting for his life for almost a week.
''I can’t afford medication or rent. I paid millions in taxes, I served in the army and in the reserves until I was 46. I won’t be homeless and that is why I am protesting against all the wrongs Israel imposes on people like me," Silmon wrote in a letter left at the site of the incident, adding that Israel "robbed me of everything and left me with nothing".