The Jewish Agency for Israel is arguing that Israel’s new austerity plan would cut immigration absorption programs so drastically as to discourage aliya and prevent needy arrivals from ever leaving absorption centers.

The chief complaint of new immigrants to Israel, or olim, and their advocates is the government’s plan to cease grants awarded to every new Israeli purchasing a home.

These gifts run anywhere from between about $5,000 and $60,000 — with the largest amounts granted to Ethiopians and others from economically distressed countries, according to the Jewish Agency.

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The complaint comes amid a backdrop of general strikes and angry demonstrations over what would be one of the most precipitous budgetary cuts in the history of the Jewish state.

The Histadrut labor federation initiated crippling strikes this week in response to proposed layoffs of about 10,000 public-sector employees and salary cuts averaging 9% for the remaining workers.

By agency officials’ accounts, the cause of new immigrants has been all but drowned out by the workers’ backlash to the so-called emergency economic plan.

“Aliya is going to take a big hit,” said the director general of the agency’s immigration and absorption department, Mike Rosenberg. “Immigrants who come to Israel by choice may decide not to move to Israel. Olim from distressed countries like Ethiopia will never be able to purchase an apartment. They will be stuck in absorption centers until the government wakes up.”

While the Israeli government would continue to offer low-interest mortgages to new immigrants, it would stop awarding portions of that loan as gifts. Mortgages of between $16,000 and $70,000 are made available to new Israelis within the first seven years of their arrival.

The immigrants are eventually able to keep between 30% and 90% of the mortgage as gifts. Rosenberg said the elimination of the grant would affect tens of thousands of new Israelis.

Although approved by the government, the cuts introduced by Finance Minister Benjamin Netanyahu as an economic recovery plan must still pass the Knesset. The cuts total $2.3 billion and would serve to correct a budget deficit that is reportedly $6.3 billion — or 6% of the country’s gross domestic product.

New immigrants won a victory last week over one particularly harmful cut. The Jewish Agency and Israel’s immigration absorption minister, Tzipi Livni, succeeded in lobbying the government to reverse Netanyahu’s recommendation to all but eliminate a program that pays immigrants’ college tuitions. Immigrant advocates argued it would herald a steep decline in the number of young arrivals. Instead, the government will chop about 20 million NIS, or $4 million, in 2004 from the $29 million program. The Jewish Agency, which funds one third of the program, will replace 75% of the reduction.

Israeli politicians and American Jewish leaders also succeeded in convincing the Israeli government last week to abandon a proposal to stop funding the popular Birthright Israel program, which offers young Diaspora Jews free trips to Israel.

But because the government initially passed the measure eliminating mortgage grants, it will be more difficult to reverse it or to gain support from government ministers, agency officials said.

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