Prime Minister Benjamin Netanyahu is having difficulty in getting the budget through the cabinet. The government discussion on the state budget for 2015-2016 has been postponed because of the objections of the haredi parties to the prime minister's request for a cut in items that he himself promised them in the coalition agreements.
As "Globes" revealed on Thursday, Netanyahu is asking the Shas and United Torah Judaism parties to forego spending that was promised them only months ago. The government was due to approve the budget framework today, but the discussion has been postponed. The detailed budget is supposed to be approved by the government by the end of the month and by the Knesset in November.
Among the proposals that Netanyahu has raised are that the promised increase in child allowances should be spread over a longer period, a cut in the increased stipends for yeshiva students and Jewish religious institutions, and elimination of NIS 20 million "pocket money" for each member of the haredi parties and the Habayit Hayehudi party. The Ministry of Finance is threatening an across-the-board cut of ministerial budgets unless a dramatic cut in the supplements promised in the coalition agreements is achieved.
The excess over the budget ceiling permitted by law currently stands at NIS 14 billion on paper. This is made up of a basic excess as a result of routine updates ("the automatic pilot"), to which have been added in the past few weeks NIS 4 billion for raising the defense budget in accordance with the Locker committee recommendations, and NIS 8.3 billion for items promised in the coalition agreements.
In practice, the excess is smaller, because the Locker report allows for non-budgetary ways of financing the increase in defense spending, and because Minister of Finance Moshe Kahlon is prepared to defer fulfillment of the promise in the coalition agreement with his Kulanu party for a rise in pay for conscripts that will cost over NIS 1 billion.
This morning, "Yediot Ahronot" reports that the Bank of Israel estimates that the fiscal deficit in 2016 will be NIS 50 billion, which compares with a Ministry of Finance estimate of NIS 30 billion (less than 3% of GDP).
Published by Globes [online], Israel business news - www.globes-online.com - on July 12, 2015
© Copyright of Globes Publisher Itonut (1983) Ltd. 2015