Netanyahu and Steinitz
Photo: Moshe Milner, GPO

Lateral cuts expected for State budget

Budget cuts will be brought before cabinet for approval on Monday; early details reveal all but education, defense and welfare budgets will be decreased by 5%. 'Choices must be made,' says PM

Details of the budget cuts which will be brought before the cabinet for approval on Monday are beginning to emerge.


Ynet has learned that the military, pensions and schools will be kept outside of the cuts and the Defense Ministry, Education Ministry and Ministry of Social Services will receive directives from the Finance Ministry to cut office budgets rather than school, defense establishment and welfare services activities.


In addition, the 5% cuts will apparently apply to the ministry budgets and not the annual supplements. The core budget is the lion's share of every ministry's budget which is automatically approved every year. This means that the current cuts will decrease the State budget in future years as well.

נתניהו ושר האוצר שטייניץ (צילום: אוהד צוינגברג)

PM: 'Can't spend on everything' (Photo: Ohad Zwigenberg)


On Tuesday it was reported that the finance minister is to ask the cabinet on Monday to approve a 1% increase in VAT (Value Added Tax), carry out lateral budget cuts throughout government offices to the extent of NIS 700-900 million ($172-221 million) and increase manpower in the Tax Authority with 600 additional places.


Prime Minister Benjamin Netanyahu and Finance Minister Yuval Steinitz on Wednesday held a meeting ahead of next week's cabinet deliberations.


During the meeting the prime minister stressed that the solutions which will be brought before the cabinet on Monday were selected from several alternatives including the cancellation of the free education from age 3 programs which came in response to the Trajtenbeg committee recommendations and cutting welfare budgets.


"In the last year we chose to focus on stopping infiltrators and we largely succeeded in halting the wave of illegal infiltrators that flowed through the country," the prime minister said at the meeting.


"We decided to invest in the fire services, including aerial firefighting and we are handling security challenges in light of the changing reality. This all costs money. We can't spend on that and everything else, choices must be made."


Netanyahu confirmed that the budget would not affect pensions, Social Services Ministry daycare and Education Ministry financial contributions to school operations. "Not at the expense of education, not at the expense of welfare, we're excluding them," Netanyahu noted.


In the meeting, the finance minister said that the moves which will be presented for approval are "a basic package that tells the world, the credit rating companies, investors and the international arena that we mean what we say. We increased the deficit target from 1.5% to 3% and we will take every possible measure to meet the new deficit target."


The finance minister noted that if the State of Israel does not meet the deficit target it would be getting closer to a state of insolvency.


"This is the Israeli economy's line of defense. Anyone who suggests otherwise, those who suggest that we declare that we cannot meet the deficit targets, are suggesting a situation like Spain or Greece."



פרסום ראשון: 07.25.12, 16:23
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