Finance Ministry must cut NIS 6.6 b., expect painful cuts

The main change in the Ministry of Finance's budget department will be the timetable of its officials to achieve a massive budget cut of NIS 6.6 billion. Until Monday, they had until the end of March 2013 to submit the final budget - plenty of time.
Following Tuesday's decision by Prime Minister Binyamin Netanyahu and Kadima party leader Shaul Mofaz to team up and avoid early elections, the ministry officials now have two months to do everything: submit a budget, make budget cuts, change taxes, submit structural reforms, and submit the 2013 economic arrangements bill.
According to figures presented by Governor of the Bank of Israel Stanley Fischer last Wednesday, the government faces a NIS 6.6 billion budget shortfall - budget-breaking spending anchored in laws. Fischer stressed that the estimate was conservative, and that he was waiting for Ministry of Finance data. Sources inform ''Globes'' that the Bank of Israel's estimate assumes that there will be no defense budget supplements in 2012-13.
Ministry of Finance officials said Tuesday that, while there were still no specific numbers, it was already clear that the Bank of Israel's estimate was conservative, and the shortfall was larger. The size of the needed budget cut will require real changes in priorities and painful concessions.
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