On the evening of Nov. 11, just moments before the Knesset’s Finance Committee took its crucial vote to approve the state budget, Shas Party members announced that they intended to vote against the budget. The chairman of the Shas Party, Minister of Development of the Negev, Galilee and Periphery Aryeh Deri, had instructed the members of his party to protest at an especially problematic time, leaving the committee’s chairman, Knesset member Moshe Gafni of Yahadut HaTorah, little choice but to cancel the meeting.
The excuse for the crisis that Deri initiated, and which is currently being resolved, was his demand that the VAT be reduced to 0% on public transportation for the entire population and on water for weaker sectors in Israeli society. The cost of this plan is estimated to be hundreds of millions of shekels.
The “Zero Percent VAT Law” is the banner that Deri is planning to raise in the next election, when appealing to the “transparent population” (the weaker sectors, as referred to by Shas in its last election campaign), which he hopes to represent. Hence, it is likely that by Nov. 19, when the budget for 2015-16 is brought before the Knesset plenum for approval, Deri will be on the winning side. He simply cannot allow himself to give up on his plan for 0% VAT, which was his big campaign promise. This is especially true after all the political and social damage Deri suffered by resigning from the Ministry of the Economy, just so that Prime Minister Benjamin Netanyahu could pass the natural gas blueprint (which he originally refused to approve).
On the other side of the argument is Finance Minister Moshe Kahlon. Kahlon came to this position as the great social hope of the last elections, on March 17, but his image has suffered considerably since then — not least because of his personal friendship with billionaire Kobi Maimon. It was because of this friendship that he avoided dealing with the dismantling of the gas monopoly, even though he promised explicitly to work on that before the last election.
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