Finance C’tee chairman: NIS 15b unaccounted for in budget

Very large gap between expenditures and revenues, says Nissan Slomiansky.

October 1, 2014 15:59
1 minute read.
 Yair Lapid and Binyamin Netanyahu

Finance Minister Yair Lapid and Prime Minister Benjamin Netanyahu.. (photo credit: RONEN ZVULUN / REUTERS)

Knesset Finance Committee Chairman Nissan Slomiansky on Wednesday said that the budget framework proposed for 2015 left NIS 15 billion unaccounted for.

“The gap between the expenditures and the revenues is very large and I’m not sure gathering shekels [from cutting smaller budgets] will cover it,” he said in an interview with Army Radio.

Increasing the deficit to 3.4% of GDP meant that extra borrowing would pay for NIS 10b in spending. The overall hole, however, was closer to NIS 25b, meaning NIS 15b in expenditures were still unaccounted for.

Prime Minister Binyamin Netanyahu and Finance Minister Yair Lapid agreed to a budget framework before the Rosh Hashana holiday that would raise the deficit, add NIS 6b in defense spending, include Lapid’s NIS 3b 0-VAT housing policy, and keep taxes steady.

Lapid also announced an additional NIS 1.8b increase in education spending and NIS 2.8b in spending for health.

Meanwhile, credit ratings agency Moody’s put out an announcement on Israel’s credit-worthiness, which warned of negative consequences if Israel strays too far from its fiscal path, but leaving its rating and outlook unchanged.

“Israel's creditworthiness could improve following a substantial further reduction in the government's debt levels would improve Israel's creditworthiness,” the report said “Conversely, the rating outlook could be lowered to negative if the commitment to fiscal discipline, in particular the consensus around fiscal consolidation, were to wane.”

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