The Ministry of Defense is demanding from the Ministry of Finance a budget supplement of NIS 16-18 billion for 2014-2015. This includes an extra NIS 6-8 billion for Operation Protective Edge and a further NIS 11 billion for the main 2015 budget.
The defense Ministry claims that the NIS 11 billion for 2015 is required for "strengthening." The Ministry of Finance is currently opposed to these demand but talks are continuing.
Last Thursday Minister of Finance Yair Lapid convened a press conference and insisted that he would not raise taxes next year and said that it would be possible to finance the expenses of the military operation in Gaza from existing financial sources.
He said, "The annual government budget is currently 2.5% of GDP, while the deficit target for the current year is 3% of GDP, so we have room below the target to deal with the costs. Concerning 2015, I won't pretend that the operation isn't creating new issues. We're working with the defense establishment, and there are new demands that didn't exist before. We know now how to construct a better budget. We have quite a few ways of saving money and cutting costs. We think the budget deficit for 2015 will be closer to 3% of GDP."
Published by Globes [online], Israel business news - www.globes-online.com - on August 10, 2014
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