Budget to go down to wire amid Shas threats

Kahlon promised that the budget would help bridge the gap between rich and poor in Israel.

August 2, 2015 21:35
1 minute read.
Economy Minister Aryeh Deri (L) speaks to the Knesset as speaker Yuli Edelstein looks on

Economy Minister Aryeh Deri (L) speaks to the Knesset as speaker Yuli Edelstein looks on. (photo credit: MARC ISRAEL SELLEM)


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Shas leader Arye Deri reiterated his threats to bring down Prime Minister Benjamin Netanyahu’s government over the weekend if there is not a zero-percent VAT on basic household items in the final version of the 2015-2016 state budget.

Netanyahu’s cabinet received the budget proposal from Finance Minister Moshe Kahlon Sunday. Its reforms will be presented to the socioeconomic cabinet Tuesday and the cabinet as a whole Wednesday.

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Ministers said Finance Ministry staffers keep postponing meetings with them, which are not expected to take place until Tuesday during the meeting of the socioeconomic cabinet. For instance, a key meeting between Deri, who is the economy minister, and Treasury officials that had been set for Sunday was postponed to Monday at the earliest.

“Zero percent VAT must be in the budget,” a source close to Deri said. “It’s not a matter of whether. It’s a matter of how. The Finance Ministry isn’t very interested in it, but if Netanyahu’s commitments in the coalition agreements are not kept, the Shas faction will oppose the budget.

Shas officials said nothing has changed in the past few months since the commitment was made to prevent zero percent VAT from being part of the budget.

Channel 2 reported that there is also opposition to the budget from the Bank of Israel and that the budget will include a three percent cut in all ministries across the board, which will upset many ministers.

Kahlon, however, promised that the budget would help bridge the gap between rich and poor in Israel.

“In this budget, we are doing what others only talked about,” Kahlon told reporters Sunday. “We set goals and this budget will help us achieve them. Whoever votes against the budget votes against the effort to lower the cost of living.”

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