PM Netanyahu, Finance Minister Steinitz 370.
(photo credit: Sebastian Scheiner/Reuters)
Prime Minister Binyamin Netanyahu has reportedly decided to postpone the cabinet
budget discussions until after the September-October holiday period over
concerns that the Knesset will not approve the proposal as it currently
The cabinet was supposed to begin reviewing the budget on
September 2 and finalize its submission to the Knesset by September 13, under a
timetable released last week by Netanyahu and Finance Minister Yuval
The talks will now be held in mid-October, according to reports
in the Hebrew-language business dailies, although no official announcement has
been made. The Prime Minister’s Office and the Treasury did not respond to
requests for confirmation.
Discussions between Treasury and Defense
Ministry officials over defense expenditure, generally the largest component of
the state budget, are still scheduled to begin on Wednesday.
raise fresh doubts that the government will pass its 2013 state budget before
the December 31 deadline. Should it fail to pass a new budget in time, the 2012
budget will remain in force next year – with each ministry receiving 1/12 of its
usual allocation at the start of each month. Consequently, this would increase
the possibility of early elections.
Labor chairwoman Shelly Yechimovich
responded to the reports on Tuesday, calling the postponement “completely
irresponsible” and saying that it would leave the country in “economic
“The fact that Israel operates according to a biennial budget
is grave enough, and now it turns out that even a budget formulated once every
two years has been postponed to the last minute without any orderly
administrative work,” she said.
“This is the height of negligence and
shows an inability to make decisions. The result will be a lack of a planned and
intelligent state budget, or alternatively a rushed vote on various paragraphs
without anybody reading the budget book and the Economic Arrangements Law in
The 2013 state budget will be the Netanyahu
government’s first single-year budget, following the biennial budgets of 2009-10
and 2011-12. It is expected to include billions in expenditure cuts,
complementing recently approved tax hikes.
Value-added tax will rise one
percentage point to 17 percent on September 1, all income between between NIS
14,001- 41,830 per month will be taxed an extra 1% and all income above NIS
67,000 per month will be charged a 2% surtax from January 1, as part of a
package worth an estimated NIS 14 billion per year to state
Bank of Israel Governor Stanley Fischer warned last week that
the government will need to cut close to NIS 17 million if it is to meet its
budget deficit obligations. Speaking on Channel 2’s Friday night news show Ulpan
Shishi, Fischer said there was no need to remind Netanyahu and Steinitz of this,
as “they already know it.”