Israel's Ministry of Finance is optimistic that the hard work of putting together the 2015-2016 budget is almost completed. Only the size of the defense budget remains to be decided and there too agreement is close. On this matter Defense Minister Moshe Ya'alon is due to meet with Prime Minister Benjamin Netanyahu today with the implementation of the Locker Report on defense cuts still a bone of contention. Yesterday, Ya'alon met with Minister of Finance Moshe Kahlon on the matter and the coalition is taking into account that Ya'alon may vote against the budget in the cabinet, as a protest against the adoption of some of the report. However, in the Knesset, Ya'alon will abide by coalition discipline and vote in favor.
In addition, there are pockets of resistance against the ministry of finance's planned the across-the-board 3% cuts in ministries budgets. Another problem has been Minister of Economy Aryeh Deri threatening to vote against the budget over the postponement of the plan to exempt basic products from VAT. Despite all this, Ministry of Finance officials believe that the cabinet will pass the budget, perhaps by the coming Thursday, and that there is a solid majority for its approval.
Confidence at the ministry of finance that the budget will be passed and economic satisfaction over it grew this week after a compromise was achieved with Deputy Health Minister Yakov Litzman over child allowances. Politicians are arguing over who takes credit for the creative solution devised - long-term savings over 18-24 years.
Ministry of finance officials feel certain that following Litzman's flexibility, the rest of the coalition partners led by Habayit Hayehudi's Naftali Bennett will close ranks. In this way overall expenditure on coalition agreements in the 2016 budget can be reduced from NIS 8.2 billion to NIS 4 billion. In this manner, ministry of finance officials believe, the 2.9% budget deficit set by Kahlon can be achieved.
Published by Globes [online], Israel business news - www.globes-online.com - on July 30, 2015
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