Ministry of Finance officials are warning against a 2008 budget blowout. Only two months after the Knesset passed the budget, threats to the budget framework amount to more than NIS 10 billion as a result of government decisions for budget supplements for certain ministries and private member bills by MKs.
The Ministry of Finance officials wants to apply a kind of mini economics arrangements law that will freeze a number of outlays caused by recent cabinet decisions and Knesset legislation.
The ministry officials cite, among other measures Prime Minister Ehud Olmert's announcement of a NIS 350 million budget allocation to protect 8,000 homes in Sderot and communities along the Gaza Strip, an extra NIS 1 billion in teachers' salaries, and higher budgets caused by the cancellation of freezes on pensions and cancellation of the health tax on housewives. The last two items were included in the 2008 Economics Arrangements Law, but were removed under pressure from the Knesset.
The ministry officials also object to the new IDF reserve duty law, which grants benefits and tax breaks to reservists; a proposal to reduce class sizes in kindergartens and schools; free or subsidized dental care to children up to the age of 18; automatic nursing care to pensioners over the age of 80; the recognizing of mortgage interest payments for tax purposes, and a tax credit for childcare for working mothers.
The Prime Minister's Office does not want to make any budget cuts at this time. Sources inform ''Globes'' that Ministry of Finance officials have sent out feelers to officials at the Prime Minister's Office, and possible Olmert personally, regarding the size of the budget cut that will be necessary in view of the budget supplements approved in the past three months.
Published by Globes [online], Israel business news - www.globes-online.com - on February 18, 2008
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