State budget delayed due to coalition infighting

Netanyahu is angry with Shas and UTJ, both over their lack of cooperation on the budget and the rebellion of haredi MKs.

July 26, 2015 19:50
2 minute read.
The Knesset

The Knesset . (photo credit: REUTERS)

Prime Minister Benjamin Netanyahu delayed a long-awaited cabinet meeting about the 2015-2016 state budget from this week to next week, due to continued differences among his coalition partners regarding proposed cutbacks on Sunday.

Finance Minister Moshe Kahlon suggested delaying the implementation of promises made to coalition parties during talks that led to the formation of the government, or at least spreading the benefits over multiple state budgets. United Torah Judaism and Shas have refused.

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Kahlon is expected to meet with UTJ heads Ya’acov Litzman and Moshe Gafni and Shas leader Arye Deri in an effort to resolve their differences.

Netanyahu is angry with Shas and UTJ, both over their lack of cooperation on the budget and due to the rebellion of haredi (ultra-Orthodox) MKs in last Wednesday’s vote on the committee that selects rabbinical court judges. A number of Shas and UTJ MKs voted for Labor MK Revital Swid instead of the coalition’s candidate, Likud MK Nava Boker.

Boker announced after the vote that she would no longer see herself bound by coalition discipline. But Netanyahu reportedly spoke to Boker and calmed her down.

The main dispute over the budget is Kahlon’s insistence on cutting retroactive child welfare benefits. UTJ leaders said Kahlon was aware that during coalition negotiations Netanyahu promised to retroactively restore child welfare benefits that were cut by then-finance minister Yair Lapid.

Shas leader Arye Deri has threatened a coalition crisis if value-added tax is not removed from basic household items, and Bayit Yehudi is unwilling to give up on extra funding it received for national-religious education.

There are also Likud ministers who have threatened to vote against the budget, including Public Security Minister Gilad Erdan and Welfare and Social Services Minister Haim Katz.

The budget difficulties stem from expensive promises Netanyahu made in order to secure coalition deals following the March election.

Besides reversing cuts to National Insurance Institute child allotments enacted by Lapid and the VAT exemptions for basic items, the promises include increased defense spending and Kahlon’s own initiatives to provide unemployment benefits for independent workers and increasing pension payments for the elderly.

The promises are estimated to cost some NIS 8 billion.

Given that the Finance Ministry must fill in a NIS 14b. budget hole to hit all its fiscal targets, Netanyahu is hoping to scale back some of the promises. The child allotments, for example, could be raised over a twoyear period instead of right away.

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