Steinitz: Treasury undecided on budget deficit raise

Finance Ministry is worried about falling tax revenues and their effect on meeting the deficit target for 2012.

Finance Minister Yuval Steinitz 311 (photo credit: Courtesy: Ministry of Finance spokesperson)
Finance Minister Yuval Steinitz 311
(photo credit: Courtesy: Ministry of Finance spokesperson)
Finance Minister Yuval Steinitz on Sunday rejected media reports that the Treasury had decided to raise the 2012 budget deficit by 1 percent, saying no decision had been reached.
The Finance Ministry is worried about falling tax revenues and their effect on meeting the deficit target for 2012, he said.
Third-quarter figures showed a drop in revenue, caused by the growing economic crisis in Europe and falling prices on the Tel Aviv Stock Exchange, Steinitz said.
Raising the budget would mark a change in policy by the finance minister, who has long spoken of the need to maintain the budget framework regardless of the circumstances.
Under the current government, Israel became the first country to adopt a two-year budget. The budget is for 2011-12.
Before Steinitz’s clarification, Defense Minister Ehud Barak released a statement in support of an increased budget deficit.
“We must expand the budget framework to meet the crucial mass of social needs, essential defense needs and the need to protect ourselves from the coming recession,” he said. “A controlled and supervised increase of the deficit will protect the human and economic fabric of Israeli society. In times of crisis this is more important than anything else.”