Yair Lapid at Cabinet Meeting, looking official 370.
(photo credit: Marc Israel Sellem/The Jerusalem Post)
The nation’s budgetary woes took a turn for the better, according to Sunday’s
monthly budget calculation from the Finance Ministry, as the 12-month deficit
dropped to 4 percent of GDP, well below the 4.6% target set for the
Earlier in the year, the 12-month deficit had reached 4.5% but
started dropping as the state began collecting more revenue from big-ticket
business deals, such as Warren Buffett’s purchase of Iscar in May.
first six months of the year, the Treasury paid out NIS 10.3 billion more than
it took in, a decrease from the NIS 11.1b. deficit in the same period of 2012.
When the overall 2012 deficit exploded to 4.2% of GDP, well over the 3% target
set for that year, the nation’s finances became a central issue in the January
Since then, Finance Minister Yair Lapid set out a program of
budget cuts and tax increases to bring the deficit in line. While Lapid put the
2014 deficit target at 3%, he raised the 2013 target to a hefty 4.6%, saying
there was limited wiggle room to adjust the nation’s finances before the end of
the calendar year. Some tax increases, however, such as VAT and taxes on beer,
cigarettes and hard alcohol, came into effect in recent weeks and
The government has operated on a monthly version of the 2012
budget and will continue to do so until the financial plan for 2013-2014 passes
in the Knesset. The budget must be approved by the end of July, otherwise new
elections will be called automatically.
A Yesh Atid-sponsored
electoral reform bill being considered in the Knesset would cancel the law
requiring new elections if a budget fails to pass.
Also on Sunday,
members of the Knesset Finance Committee expressed marked opposition to a
proposed tax on “housing improvements,” levied on non-first-time home
Representatives from the Construction and Housing Ministry
sparred with Treasury officials, arguing that the tax would hurt the real-estate
market by making it more expensive. The Treasury officials said the state needed
the expected NIS 1.05b. in annual revenues to meet deficit goals, arguing that
the tax was designed to primarily affect the affluent and would only be in place