Prime Minister Sharon
Photo: Reuters
Sharon cancels budget cut
One day after Finance Minister Benjamin Netanyahu resigns, Prime Minister Ariel Sharon cancels NIS 850 million cut to defense budget planned by Netanyahu; Ministry demanding NIS 1.5 billion in cuts, prime minister offering 650 million
Prime Minister Ariel Sharon decided Monday to reduce the budget cut to the Ministry of Defense by NIS 850 million (USD 189 million), for a total cut of NIS 650 million (USD 145 million).
The finance ministry had demanded am NIS 1.5 billion cut in the defense budget.
Tuesday, the government will discuss next years budget. Ministry officials are expected to present their budgetary outline, to be followed by a government debate in which each minister will speak about his or her ministry’s budget.
Last week, then-finance minister Benjamin Netanyahu presented his outline for the 2006 budget, to include NIS 272 billion.
Netanyahu requested a NIS 3.6 billion cut overall – NIS 1.5 billion from the Defense Ministry, NIS 1.1 billion from other government offices, and an additional billion shekels from other programs.
Other ministries will pay
Finance Ministry officials said they knew of Sharon’s plan to reduce the defense budget cut, and stressed the move would mean further cuts to other ministries.
After meeting with Sharon Monday, acting Finance Minister Ehud Olmert expressed support for the ministry’s position. The two agreed that the government’s fiscal policy would remain unchanged in the absence of Netanyahu.
The framework of expenditure for government ministries will rise just one percent, and the ministry will not tolerate a deficit of more than three percent.
Defense Ministry director-general, Maj. Gen. (ret.) Amos Yaron, spoke about possible cuts to the ministry for 2006. He said it seems the exit from Gaza will save NIS 100 to 150 million per year.
"We must let time work its magic,” he said. “And if there really is quiet and we can save money, we’ll be the first to return the extra money to the Finance Ministry."
