Minister of Finance Yuval Steinitz and Shas leader Eli Yishai have agreed to reduce budget cuts in ministries under Shas jurisdiction. Meanwhile Prime Minister Netanyahu and Ehud Barak's Independence faction have agreed that the upcoming general budget cuts will not include the Defense Ministry and Industry, Trade and Labor Ministry budgets.
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In exchange for Shas's support of the economic measures, the Ministry of Interior will only suffer a NIS 23 million ($5.71 million) budget cut instead of the planned NIS 37 million ($9.18 million).
Netanyahu and Steinitz: Seeking cuts support
The Ministry of Housing and Construction also headed by Shas will retain NIS 16 million ($3.97 million) due to the agreements. This money will go to public housing.
After the agreement was reached, Minister Eli Yishai said "Local municipalities in Israel and thousands of people in need of public housing were spared a drastic budget cut thanks to our uncompromising stand."
Housing Minister Ariel Atias posted a similiar message on his Facebook page: "We'll receive substantially big budgets to enlarge the scope of standards of public housing. And have no doubt; We'll continue to press for a bill which obligates a 5% budget to public housing."
The Independence faction and Prime Minister Netanyahu have agreed that the Defense Ministry will only cut NIS 18 million ($4.47 million) from its budget as opposed to the planned NIS 100 million ($24.8 million).
Independence has also managed to prevent budget cuts in daycare centers and technological education which are under the authority of the Ministry of Industry, Trade and Labor.
The deal was struck after Steinitz "fined" Barak for opposing the economic measures on Monday. Minister Barak said his stance stemmed from a difference in opinion between him and Netanyahu regarding economic issues.
"In times of growth the government's job is not to interfere with the enterprise and the momentum of the free market, to lower debt and to accumulate surplus for a rainy day," said Barak.
"But during a world recession the government's job is to prevent society's collapse and the (collpase of) market systems. This is about hard working people in small and medium businesses who carry the State on their back," he added
Next week the Knesset will convene to discuss the upcoming economic measures. Apart from budget cuts the measures include price hikes for gas, beer, cigarettes and raising income tax for people whose monthly salaries exceed NIS 8800 ($2,183).
Avital Lahav contributed to this report
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