The Finance Ministry distributed copies of its 2015 budget proposal to government ministers on Wednesday, ahead of a vote on the budget scheduled for next week. The budget includes significant cuts totaling 7 billion shekels and an annual deficit of 4.3 billion shekels – used to fund an additional injection to the defense budget.
The austerity measures are composed of 3.7 billion shekels cuts to government expenses and increasing state revenues by 3.3 billion shekels. The deep cuts are required as the budgetary additions already reached 11.5 billion shekels, despite a financial regulation allowing additions of no more than 8.2 billion shekels.
- Of the 3.7 billion shekel cuts, a billion will be taken out of the budgets for transportation, housing, and the budget for construction of schools – though one billion will be transferred from the Jewish National Fund to cover the cuts.
Finance Minister Yair Lapid (Photo: Ilan Sapira)
Some 1.7 billion will be cut from a number of ministries, out of which 330 million shekels will be funded by reducing salary expenses, through cutting back on additional hours and the scope of certain positions.
Another 600 million shekels will be cut from the transportation budget, by postponing road-paving and track-laying projects. The paving of the news Motza-Jerusalem road will be transferred to a private contractor.
An additional 770 million shekels will be cut through a series of steps expected to be approved by the government next week. The steps are intended to allow the government ministries to better handle the across-the-board cuts approved last month – totaling two billion shekels annually.
The Regional Development Ministry will be closed, at a saving of 53 million shekels per year, while 100 million shekels will be cut from government contributions to local education budgets.
At the same time, the government will add to and increase its revenue sources, to total 3.3 billion shekels. Some 900 million will enter the treasury from the withdrawal of state-owned corporations' dividends, while 600 million will be returned to the budget by fixing tax loopholes.