Budget to go to first vote in Knesset, final vote set for Nov. 20

Margalit: Israel is going through one of worst turndowns

September 2, 2015 00:42
3 minute read.
The Knesset

The Knesset. (photo credit: KNESSET SPOKESMAN'S OFFICE)

The Knesset is scheduled to vote on the 2015-2016 state budget – the government’s first since March’s election – in its first reading on Wednesday.

After the 2,000-page budget and the Economic Arrangements Bill, which is passed at the same time as the budget, pass a first reading, the Knesset Finance Committee will begin discussing them next week to prepare for their final vote, set to take place on November 20.

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On Monday, when Finance Minister Moshe Kahlon submitted the 13-month budget to the Knesset, he said he was proud that it is “responsible and balanced” and “expresses the government’s order of priorities.

“This budget significantly expanded civil spending on education, health, public security and more... for the good of Israel’s citizens,” he said. “The 2015-2016 budget is accompanied by a broad EAB that is full of necessary reforms for the market, big reforms, the likes of which have not been seen in years.”

Kahlon vowed that the budget and EAB will ease the cost of living, increase the housing supply and work on areas such as investment, infrastructure and helping the periphery catch up to the center economically.

“All of these are engines of growth,” he said.

Since no budget was passed for 2015 thus far, the government has been functioning under the 2014 framework. The intention is for the new budget to be in effect from December 2015 through the end of 2016.

The current text of the budget cuts 3 percent of all ministries’ budgets, and the Finance Committee will have to find a way to cut an additional NIS 1.5 billion-2b., which the Finance Ministry is expected to try to take from the education and defense budgets.

The Tax Authority will have to find a way to make up for the NIS 3.2b. it is expected to lose due to Kahlon and Economy Minister Arye Deri’s agreement to waive VAT on electricity and water for the poorest 40 percent of the population, plus the reduction and eventual cancellation of VAT on public transportation, among other tax cuts.

The EAB, which is usually very long and often features items that have little to do with the budget, is meant to outline the basic economic policies that are meant to accompany the budget. At Knesset Speaker Yuli Edelstein’s behest, Kahlon agreed to remove 15 items from the bill and for three more to be moved into committees other than Finance.

The Zionist Union plans to make sure the budget’s first vote does not go as smoothly as the coalition would hope.

The largest opposition faction held a marathon meeting for several hours on Monday at the Beit Berl College in Kfar Saba to decide its strategy for fighting the 2015-2016 state budget in the Knesset.

The faction made a point of not discussing internal political issues, such as the date for the next Labor leadership race.

Instead, they spoke in depth about their ideology.

MK Erel Margalit, who was a successful venture capitalist before entering the Knesset, advised his colleagues to emphasize in the budget debate that 60,000 small businesses shut down in 2014.

“Israel is going through one of its worst downturns when the world economy is getting better,” he said after the meeting.

“For a country like Israel that has so much innovation and capability to be so weak is unacceptable, and it’s been going on for way too long.”

Margalit said the faction could support a few clauses in the budget, such as a bill that would give unemployment benefits to the self-employed.

But even on those clauses, he said the faction would demand significant changes.

He complained that the budget does not provide quality jobs for students who finish college in the periphery at colleges such as Sapir in the South and Tel-Hai in the North.

“These guys don’t know how to run the economy,” Margalit said. “Sector by sector, people are being left behind.”

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