Minister of Finance Silvan Shalom and senior Ministry of Finance officials will present Prime Minister Ariel Sharon with a framework for the new cuts in the 2003 budget.
The decision to expedite discussion of the new economic plan was settled a few minutes ago between Sharon and Shalom.
The framework includes a NIS 7-10 billion budget cut, reducing the ratio of government spending to GDP, and a civil service wage freeze or cut, which will save NIS 2-3 billion.
The planned cuts include neither new taxes, nor a compulsory loan. The plan may eventually include an adjustment of tax distortions in general, and indirect taxation in particular.
The plan will also include a substantial decrease in tax benefits for individuals and high priority regions, including Jewish settlements in the territories.
Sharon’s decision to go ahead with economic discussions of Shalom’s plan is a vote of confidence in the current Minister of Finance, and boosts his chances of being appointed to another term.
It appears that the candidacy of former Governor of the Bank of Israel Jacob Frenkel for Minister of Finance has been ruled out, if it had ever been considered.
Published by Globes [online] - www.globes.co.il - on February 12, 2003