mofaz 298 .
(photo credit: Ariel Jerozolimski [file])
The proposed 2008 state budget, at some NIS 312 billion the largest in the nation's history, was approved by the cabinet on Sunday following a stormy and tense meeting at the Prime Minister's Office that lasted more than 12 hours.
Twenty-one ministers voted in favor, and five ministers, including Transportation Minister Shaul Mofaz of Kadima and the four Shas ministers, voted against, as expected.
Ministers from Kadima, Labor, Israel Beiteinu and the Gil Pensioners Party all voted in favor.
"This is a socially sensitive budget," Prime Minister Ehud Olmert said to open the meeting.
"The dividends from economic growth will be channeled in 2008 to education, welfare and defense; the enlargement of the defense budget in 2008, in line with the Brodet Committee report, will enable Israel to better meet the challenges the country faces," he said during the meeting.
In the hours leading up to the vote, the Finance Ministry compromised on a number of key clauses in the budget. In negotiations with the Histadrut Labor Federation, the Treasury agreed not to delay the implementation of a law requiring that workers employed through manpower agencies who remain with the same company for nine months must become employees of the company and are therefore entitled to benefits.
Olmert said the budget would reduce inequality and improve education. He said government spending in 2008 would increase by 1.7 percent over 2007.
"Increasing expenses more than that would be indulging the present at the expense of the future," he said.
Finance Minister Ronnie Bar-On (Kadima) said the government would have to make 3% across-the-board cutbacks in 2008 - some NIS 300 million. The budget cuts will span all government offices except for the Education, Defense and the Welfare ministries, he said.
The cabinet discussion featured many tense moments and heated exchanges between the ministers, as each fought for their own interests.
Industry, Trade and Labor Minister Eli Yishai (Shas) left in the middle of the meeting after criticizing the budget for harming the needy.
"The current budget, as it stands, is detached from the needs of society, exacerbates social inequalities and alienates the underprivileged public," he said before the meeting.
After leaving the meeting, Yishai joined a protest outside the Prime Minister's Office against the Treasury's proposal to cancel planned stipends for polio victims.
Mofaz also left the meeting early, passing a note to Olmert that said: "This is irresponsibility on the national level and I won't lend my hand to it." He apparently became angry when he discovered that some NIS 150m. would be cut from funds earmarked to fight traffic accidents. His protest left senior Finance Ministry officials bewildered. They said the National Road Safety Authority had only used a fifth of the funds allocated to it over the past year, adding that it had a budget surplus from this year that exceeded the proposed NIS 150m. cut.
Earlier Sunday, the cabinet voted to set the defense budget's base, as recommended by the Brodet Committee, at NIS 50.5b. Half a billion shekels will be added to the defense budget this year, and NIS 1.3b. will be added in 2009.
"The defense budget, which met with the approval of officials in both the IDF and the Defense Ministry, constitutes an expression of the government's policy of strengthening the security budget and placing it at the head of national priorities," the Prime Minister's Office said in a statement.
Olmert, Defense Minister Ehud Barak and Bar-On agreed to regularly assess the effect of regional developments on the needs of the security establishment and on the defense budget, the statement said.
"Never can I ever recall a situation in which all the ministers smiled and said, 'Yes, this is what we wanted,' when presented with a new state budget," Olmert said.
Public Security Minister Avi Dichter initially threatened to vote against the budget because of what he called the "humiliating" allocation for internal security and the police. He reversed course after he was guaranteed an additional NIS 500m. for his ministry.
"The original budget might have destroyed the police," Dichter said, adding, "The additional funds will go toward empowering the police and the Israel Prisons Service, and toward the enhancement of the personal safety of every Israeli citizen."
As part of the budget negotiations, the Treasury agreed not to prevent the implementation of a law approving a one-time payment of NIS 120,000 to polio victims who suffer a 75% disability, while those who have a lower level of disability will receive NIS 50,000. In addition, polio victims will receive a monthly stipend of NIS 3,500.
The budget will now be sent to the Knesset plenum for approval.
If the 2008 budget is not approved by the Knesset by December 31, the government will continue to operate under the 2007 state budget. If the budget is not approved by March 31, the government will fall and early elections will be scheduled.