Cabinet okays 1% cut to ministry budgets

February 21, 2011 00:07

The Defense, Education, Welfare, Social Services ministries were the only ones spared the cut which will finance NIS 300 m. worth of public transport subsidies.

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Eytan Sheshinski and Yuval Steinitz.

Sheshinski and Steinitz 311 . (photo credit: Marc Israel Sellem)

The cabinet on Sunday approved a 1 percent cut to the budgets of government ministries to finance NIS 300 million worth of public transport subsidies.

The Defense, Education, and Welfare and Social Services ministries were the only ones spared the cut, which was approved by a vote of 19 to seven at the weekly cabinet meeting. The Israel Beiteinu faction voted against the plan, as did Likud ministers Limor Livnat and Silvan Shalom.

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Under the plan, a total of NIS 150m. will be cut from the ministries’ budgets for 2011 and 2012, and a further NIS 150m. will be cut from the Transportation Ministry’s budget for intercity road development.

In return, the price of monthly unlimited passes for bus and rail will drop by 10%, as will the average cost of a journey within the outlying areas and from the outlying areas to the cities.

The cabinet also voted to implement a one-year freeze on tax cuts for the top 20% of income earners, to help finance a decrease in the gasoline excise.

Finance Minister Yuval Steinitz was instructed to check the possibility of postponing by one year the planned decrease in the companies tax or of making an alternative change to the tax regime to safeguard the budgetary balance.

The budgetary trade-off was made to clear congestion on the roads and to assist people who rely the most on public transportation, Prime Minister Binyamin Netanyahu said at the cabinet meeting.

“Who uses public transportation? Not the people in the top decile,” he said. “Those people who use it are those without means and those who want to, and can, use buses and trains.”

Steinitz said the decision to exclude the education and welfare budgets was made out of social considerations.

Meanwhile, the Ministerial Committee for Legislation approved a bill initiated by Steinitz to adopt the Sheshinski Committee’s recommendations on oil and gas revenue, which would raise the state’s share of gas and oil profits to 52%-62% from the current one-third.

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