Cabinet okays 1.7% deficit limit
Motion to set lower state budget deficit limit passes cabinet vote despite Labor, Shas' objections. Treasury tells ministers it wants to cut NIS 14 billion from budget so to curb projected deficit further
The cabinet on Sunday voted in favor of Finance Minister Yuval Steinitz's motion to set the state budget's deficit limt at 1.7%.
The motion was carried with 20 yea votes and 10 nay votes, entered by Labor and Shas ministers, as well as by Education Minister Gideon Sa'ar.Both Shas and Labor demanded a higher deficit limit and it is still unclear what their next parliamentary move will be.
Earlier Sunday, Ram Belinkov, head of the Finance Ministry's budget division, told the ministers The Treasury would like to see NIS 14 billion (roughly $3.377 billion) cut from the next state budget as means to curb the government's budgetary deficit, which is expected to reach NIS 46 billion ($11.099 billion), as a result of declining tax revenues.
"We believe that if we pass a responsible budget bill, we can get Israel out from under the looming threat of the financial crisis and ensure other (state) needs are met. We could restart market growth," Prime Minister Benjamin Netanyahu told the ministers.
The Treasury has yet to detail which government bureaus will suffer the most from the proposed cuts, but all of the ministries stand to be affected by it.
The cuts are to take place over two years, Belinkov told Ynet. The government's obligations, combined with the financial uncertainty brought on by the global crisis, make them imperative.
The motion was not debated, not was a second motion, put forwards by Justice Minister Yaakov Ne'eman, to cut the ministers' salaries by 1%-2%. Finance Steinitz said he intends to explore to possibility further.
