Government approves 2007 budget
State budget for next year approved by 19 of 24 ministers. Budget to pass to Knesset for approval in upcoming month
The cabinet approved the 2007 State Budget Tuesday night, by a majority of 19 votes in favor to four votes opposed. Defense Minister and Labor Party Chairman Amir Peretz abstained. All ministers from the Shas party voted against the budget, which will arrive at the Knesset for approval in the upcoming month.
Finance ministry officials presented Labor ministers with explanation regarding increase of minimum wage. According to the explanation, the Finance Ministry will bump up minimum wage by NIS 15 (USD 3.50) per month in April. The next increase to minimum wage will be delayed from June 2007 to January 2008.
Prior to the vote, a heated meeting took place between Prime Minister Ehud Olmert to Amir Perertz. The latter said that the minimum wage issue was a red line for the Labor party, and threatened that if it were not dealt with, the PM could "start counting the days to the end of this government."
Deputy Prime Minister Eli Yishai (Shas) said "we voted against the 2007 budget because it has serious problems. I believe the budget will undergo many changes before it reaches the Knesset, otherwise Shas will vote against it again there."
Tuesday morning, in a special meeting on the budget, Finance Minister Abraham Hirchson promised that "we will not go over the budget that we decided on, which would mean that the State of Israel and the government of Israel would be in crisis."
According to Hirchson, "we want to continue upholding a stable economy. Compared to 2005, the 2007 budget already allows for an addition of about NIS 4 billion (USD 900 million) for social matters."
War's financial aftermath
In the aftermath of the war with Lebanon, and its tremendous costs, the Finance Ministry was forced to make far reaching changes to a budget whose planning had begun several months before the war in the north broke out.
Although the Finance Ministry initially spoke of severe budget cuts, public criticism forced Hirchson to undo some of the changes. Thus, for example, University budget cuts were canceled.
"The recent war proved that the government doesn't manage risks properly. How is it possible that after this war we are in greater danger than before?" protested Peretz at the meeting.
Peretz was referring to the fact that the finance minister's proposal granted the Ministry of Defense a little over NIS 33 billion (USD 7.5) for 2007. According to Peretz, this budget is lower than the year prior and does not address the military's needs.
"We need to train reserves, we need to train compulsory soldiers. We need to cope with rockets and fill emergency stores. This budget is insufficient," he elaborated.
Critical voices
Hadash Chairman MK Mohammad Barakeh had a slightly different take on the war and the budget. "Within four months, the Olmert-Peretz government has waged two wars: the first against Lebanon and the second against the poor. Such a government must disappear as quickly as possible," he said.
Barakeh called the budget "a disaster", especially in light of the fact that "this time, it is those who pretended to raise the flag for social struggle that betrayed (the poor), from this government's first day in office."
This sentiment was echoed from the other side of the political spectrum, as well. The Likud party reacted to the cabinet approval of the 2007 budget, saying "the government is consistent in one thing: violating its obligations to the voter."
"The government, which purports to be a social government, approved a budget that is nothing but edicts against the lower classes, while turning their face away from their promises," they added.
