Skip to main content

Why Israel’s finance minister went behind Netanyahu's back

Israeli Finance Minister Moshe Kahlon published his family subsidies package without first informing Prime Minister Benjamin Netanyahu.
Israeli Prime Minister Benjamin Netanyahu (R) speaks with Finance Minister Moshe Kahlon during the weekly cabinet meeting in Jerusalem January 31, 2016. REUTERS/Amir Cohen  - RTX24S18
Read in 

The Net Family Plan announced by Finance Minister Moshe Kahlon immediately after the Passover holiday on April 18 can easily be called “Net Revenge.” Without minimizing the significance of the tax credits and grants that would be distributed through the program to young middle-class families in Israel, it would be a mistake to see it only as a socioeconomic move. But “Net Family” is not only the finance minister’s revenge on the prime minister — who defeated him in the Public Broadcasting Corporation affair by means of a series of humiliations and arm twisting — it is also the opening shot of Kahlon’s election campaign.

Kahlon’s reform has four components: the addition of income tax credit points; lowering taxes on imported baby clothes, shoes and cellphones; lowering the price of afternoon daycare by means of government subsidies; and raising the income threshold below which families would be entitled to a work grant from the government. According to the calculations of the Ministry of Finance, a family of two working parents with two or three kids could improve its annual income by about 9,000-10,000 shekels ($2,500-$2,700). This plan is unique because it attempts to help the struggling secular middle class. The ultra-Orthodox would benefit less, because aside from lowering the import tax, the plan mainly helps families with two working parents, which is not the case for most ultra-Orthodox families (where often the man dedicates his time to Torah study).

Access the Middle East news and analysis you can trust

Join our community of Middle East readers to experience all of Al-Monitor, including 24/7 news, analyses, memos, reports and newsletters.

Subscribe

Only $100 per year.