Treasury looks to push 2009 budget cuts

The government will review cuts in the current 2008 budget, and will also be asked to cut the 2009 budget in formation.

Minister of Finance Ronnie Bar-On will today submit to the cabinet for approval a 6% across-the-board cut of NIS 750 million in the 2008 budget. The cut is intended to finance the reform in education, hiring of more police, and compensation to Holocaust survivors.

"Globes" has obtained a copy of a Ministry of Finance document entitled "Internal changes in the budget framework set for 2008", which states that, in addition to this NIS 750 million budget cut, the ministry will ask the cabinet to make a NIS 400 million cut in the 2009 budget, now being prepared.

For 2009, the Ministry of Finance proposes cutting NIS 170 million from the budget for local authorities, NIS 163 million from education, and NIS 42 million from higher education. The ministry marked these three items, out of 42 items, with the comment "cuts will apply on the 2009 budget base." These cuts amount to 4% of the NIS 8.8 billion planned cut in the 2009 budget.

Labor Party ministers, some of whom learned of the proposed cuts last night, will oppose them on the grounds that they are "Ministry of Finance maneuverings".

Minister of Education Yuli Tamir, currently in Brazil, sent a letter to the cabinet secretary this morning. Her spokeswoman added that Tamir strongly opposed any additional budget cut that the Ministry of Finance would try to impose in twisted ways on other ministries, especially the Ministry of Education, which could not cope with another cut. "Any additional budget cut in the system means the closing of educational activities, such as treatment for children at risk, and Israel Community Centers Ltd. Over the years, the budget cuts imposed by the Ministry of Finance on the Ministry of Education's activities have cut the system to the bone. Any additional cut will be devastating."

Published by Globes [online], Israel business news - www.globes-online.com - on August 3, 2008

© Copyright of Globes Publisher Itonut (1983) Ltd. 2008

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