Ram Belinkov
Photo: Dudu Azulai
Prime Minister Benjamin Netanyahu
Photo: Gil Yohanan
Treasury unveils cutbacks plan
Finance Ministry reveals outline for lateral budgetary cuts spanning all government bureaus; bill proposal stirs controversy, deemed brutal to struggling socioeconomic echelons
The Treasury presented the government ministers with its State budget bill Thursday, outlining major, lateral cuts in all bureaus for 2009 and 2010.
The bill, meant to be put to a Knesset vote next week, has already been deemed brutal, since many of its articles call for cuts which would affect the struggling socioeconomic echelons.
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The bill also overturns a recent court ruling making childcare expenses tax-deductible, and demands extensive cuts in social security payments, the raising of university tuition fees and a NIS 3 billion ($725.8 million) cut in defense expenditures.
The Treasury has presented its bill to Prime Minister Benjamin Netanyahu, who is said to be studying it. Ram Belinkov, head of the finance ministry's budget division, notes in the bill proposal that the cuts – or "reductions" as he calls them – are still shy of meeting the budgetary limits decided on by the government earlier this week.
'Bill delusional, cynical'
Belinkov stated that the government may need to find its way to making further cuts, pending the results of the Treasury's future negotiations with the Histadrut Labor Federation and various employers' groups.
The Treasury's bill proposes the following:
- A 10% cut in child support payments, meant to save it NIS 540 million (some $130.3 million)
- Halting all stipend revisions for those eligible for income support. Those include the handicapped, Holocaust survivors, new immigrants and discharged soldiers, and are meant to save the Treasury NIS 320 million ($77.2 million)
- A lateral cut in maternity allowances, meant to save the Treasury NIS 500 million ($120.7 million)
- Annulling the decision to make childcare expenses tax-deductible
- A 50% cut in the Treasury's support of National Insurance Institute investment fund, which in turn support endangered children, the handicapped, occupational safety and health activities and nursing
- Revoking death benefits and limiting dependents pensions
- Cutting tax credit points
- Cutting the State's subsidies for hospitalization
- Cutting supplementary benefits given to new immigrants on top of absorbent package.
- Cutting housing assistance
- Cutting a half tax point given to working women without children and diverting it to working women with children
- Annulling the negative income tax plan
- Raising university tuition fees
- Cutting 10% of the retainer paid to non-State employed criminal defenders
- Cutting State employees' travel expenses
The proposed bill has already caused a ruckus, with the article calling to annul the decision to make childcare expenses tax-deductible perceived as especially strident, since it was only recently rendered and was the result of a long legal battle.
Social Affairs Minister Isaac Herzog was first to criticize the bill, calling the outline "delusional" and "cynical."
Netanyahu, he added, would have to decide "whether he wants to find a solution and expand the budget, or find himself with a political crisis on is hands."
