Cabinet likely to approve Netanyahu’s proposed NIS 4.519B. budget cut

13/02/2004 10:23 By Baruch Kra and Moti Bassok, Haaretz Correspondents and Haaretz and BPI.Service A majority of ministers are expected to approve Finance Minister Benjamin Netanyahu’s request Sunday to approve a 4.519 billion shekel cut to the budget of all government ministries, in order to finance budget increases to the Defense Ministry and the Interior Ministry (for the local authorities). Netanyahu is scheduled to meet Friday with Education Minister Limor Livnat and Minister of Labor and Social Affairs Zevulun Orlev to discuss the planned cuts to their ministries’ budgets. As an alternative to the planned cuts to the education and health and welfare budgets, Livnat is expected to propose canceling child benefits for Israelis whose wages are in the two top percentiles. Health Minister Dan Naveh announced Thursday that he backs Livnat’s proposal. The Education Ministry will receive an extra NIS 214 million (to fund educational TV, cultural institutions, establishment of a soccer field in Sakhnin, and implementation of the law requiring integration of special-needs children in schools), while also enduring budget cuts of NIS 224 million. All told, the education budget will drop by NIS 10 million this year. Netanyahu’s proposed NIS 4.519-billion cut is divided into four parts: a NIS 1.718-billion reduction in acquisitions by government ministries; a cut of NIS 1.439 billion in the general reserves and NIS 1.019 billion in funds set aside by each ministry in case of inflationary price rises; and an additional reduction of NIS 0.344 in allocations to ministries that will derive from the drop in VAT from 18 to 17 percent.

Budget increases of NIS 4.5 billion to government ministries include funds which Netanyahu promised when the state budget was approved in early January 2004, to Livnat, Naveh and Industry and Trade Minister Ehud Olmert, along with Shinui, the National Religious Party and the National Union. The Defense Ministry will receive the largest budget increase, of NIS 1.8 billion, and another NIS 0.9 billion will go to the local authorities (as part of their recovery scheme, and also as special „budget-balancing payments” to them). Another NIS 0.45 billion will be allocated to the Industry and Trade Ministry for research and development, and to promote exports; NIS 0.3 billion will be allocated to the Health Ministry; NIS 0.214 billion will go to the Education Ministry; and NIS 0.1 billion will be earmarked for the war on crime. Excluding the results of the change in VAT, the 2004 Defense Ministry budget will receive an extra NIS 1.8 billion – but there will also be an NIS 0.477 reduction in funds for defense spending. All told, this budget will increase by more than NIS 1.3 billion. In early January, Netanyahu promised to add NIS 300 million to the Health Ministry budget. Cuts of 5 percent in operating budgets of the ministries will mean that this particular ministry will then receive a total addition of NIS 288 million this year. Netanyahu vowed Thursday that the government will not increase its budget expenditures. „Any addition to the budget of one ministry will come at the expense of allocations to a second ministry,” he said. Naveh: school health services to be canceled if cut goes through Naveh said Thursday that if the government approves a 6-percent cut to the health ministry, school health services and medical insurance for the children of foreign workers would be canceled, and a shelter for women who were sold into prostitution would be shut down. He added that drugs will not be distributed to hemophilia patients and that geriatric hospitals and mental health hospitals would suffer from the planned cut. Meanwhile, Public Security Minister Tzahi Hanegbi threatened Thursday to vote against additional cuts to government offices if the treasury doesn’t allocate money to fight crime. The treasury decided to slash NIS 90 million from the police budget immediately, Hanegbi said. The cut is a „death blow to the ability of the police to function and be responsible for public security,” he said. BPI.