Bar-On proposes reforms to boost growth, cut wealth gap

Finance Ministry officials informed the cabinet that they opposed any increase in the defense budget, despite recommendations by the Brodet Committee.

By MATTHEW KRIEGER
July 30, 2007 07:53
1 minute read.
cabinet meeting 88 298

cabinet meeting 88 298. (photo credit: Ariel Jerozolimski)

Finance Minister Ronnie Bar-On presented at Sunday's cabinet meeting, which was dominated by budget discussions, a list of reforms aimed at increasing the economic growth of the country, reducing unemployment and narrowing the gap between the country's rich and poor citizens. "The government has a responsibility to look after its citizens and not only at the time of budget decisions being made - there are 24 hour a day, seven day a week problems in this country, and it is up to this group (the cabinet) to ensure that permanent changes are instituted," said Bar- On. Budget Director Kobi Haber described in detail to the cabinet the reforms proposed by Bar- On, focusing on the finance minister's goal of increasing economic growth, the country's competitive standing, increased employment opportunities, streamlining the county's service institutes, infrastructure development and the strengthening of Israel's weakest sectors. Separately, Finance Ministry officials informed the cabinet that they opposed any increase in the defense budget, despite recommendations by the Brodet Committee appointed to assess the budget and the demands from the defense establishment to increase the defense budget by some $3 billion. Finance officials explained that the defense budget was already a heavy burden on the economy, and that if an increase is eventually approved; it should be allocated in stages over a number of years. The Treasury is also opposed to recommendations to raise the limitation on the general budget's yearly addition from 1.7 percent to 2.5%, and to run the defense budget as a multi-annual budget. Bar- On additionally informed cabinet members that an official agreement has been signed between the Finance Ministry and the Histadrut, following last week's tentative agreement that brought an end to the one-day general strike called by the Histadrut. According to terms of the agreement, Histadrut workers will get a five percent pay raise over three years, beginning at the end of 2007 with an increase of 1.5%, followed by a similar raise in 2008 and a 2% raise in 2009.


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