Government approves budget

Following lengthy discussions, government approves 6.5% cut in budget of all ministries, defense budget to by reduced by NIS 1.5 billion; Shas ministers object, budget now requires Knesset approval

Roni Sofer|Last update: 05.13.09 , 12:42

The government approved Wednesday the deal between the Treasury, industrialists, and the Histadrut labor union federation, thereby approving the State budget for 2009 and 2010.

The budget includes a 6.5% cut to all government ministries, including a roughly NIS 1.5 billion (nearly $400 million) cut in the defense budget.

Prime Minister Benjamin Netanyahu lauded the budgets approval, saying that ministers were able to "find the balance between socioeconomic needs and security needs."

"We prevented harm to the weak sectors of society, as we promised," he said.

Only Shas' four ministers voted against the budget, despite earlier threats by Yisrael Beiteinu to also object to the cuts. Education Minister Gideon Sa'ar, who also expressed doubts regarding his vote, ended up supporting the decision. The budget will now have to be approved by the Knesset.

Government approves budget (Photo: AP)

Meanwhile, the head of the Treasury's budget division, Ram Balinkov, tendered his resignation to Finance Minister Yuval Steinitz in the wake of the budget's approval. Balinkov announced that his responsibility to the State budget and to the economy requires him to quit, in light of the events of recent weeks.

Opposition leader MK Tzipi Livni also had harsh words for the budget at a Kadima faction meeting on Wednesday: "This is a blatantly bad budget, which weakens Israel's ability to deal with the crisis."

The former foreign minister added: "Netanyahu is paying the price for his political agreements. He is supposed to know about economics and this is therefore unforgivable. There is no responsible government in Israel."

Army chief loses his cool

The lengthy budget discussions, which got under way Tuesday, included several dramas and harsh charges, as emotions ran high throughout the day. Ram Balinkov, head of the Treasury's budget division, was overheard making unusually harsh statements, captured by Channel 10 cameras. Among other things, he charged that "a prime minister had already quit for lesser issues – this is a bribe." Balinkov later said he was referring to the conduct of Netanyahu's economic advisor, Uri Yogev, and not to the PM himself.

In another tense moment, IDF Chief of Staff Gabi Ashkenazi lost his cool in the presence of ministers after discovering that the issue of career officers' retirement age was brought up for discussion, despite an earlier agreement with the PM.

Ashkenazi slammed the intention to raise the retirement age, telling Netanyahu that career officers are not manpower workers and "do not have a labor union." The PM responded: "I cannot accept the claim that the defense establishment cannot become more efficient," prompting the army chief to counter: "So don't accept it." Ashkenazi later apologized for his remarks.