Tuesday night's budget-altering "games," shifting more than NIS 1.1 billion to various ministries ahead of cabinet approval, did not impress market analysts. "Nothing significant happened there. They always do that. It's a game: They take away and give back at the last moment, and there will be many, many more changes before the budget is passed. And there's a chance that it won't pass at all," commented Excellence Nessuah chief economist Shlomo Maoz. Maoz reiterated his assertion that the budget is "unrealistic" and "unjust," as it loads two much of the nation's fiscal burden onto the poor. "Instead, Eilat's VAT exemption could have been canceled, VAT could have been raised, the vehicle use evaluation could have been raised [increasing state revenues from car tax], as well as the tax on fuel, and the allocation for the Capital Investment Encouragement Law [benefiting large company's decisions to build factories, for instance] could have been reduced - without reducing [welfare and National Insurance Institute] allowances," he argued. "There are a lot of exemptions that could have been cancelled." Maoz also said that the additional funds allocated to the Defense Ministry would prove to be insufficient. Others agreed that Tuesday night's brinkmanship was not the Treasury's last battle in getting the budget passed. "The real struggle for approval of the budget is expected at the end of the year or at the end of the first quarter of 2007," the economists at investment house Leader Capital Markets Ltd. said in a statement, outlining three possible scenarios for how politics and the budget vote would interact when the moment comes. In the first scenario, the budget would fail, leading to early elections. This would engender political uncertainty - and perhaps anxiety in the markets - "but this may in fact be the best alternative in terms of a restraining fiscal policy," since government ministries would receive a monthly allowance of 1/12th of the 2006 budget until a new budget is approved. Alternately, if the coalition is rearranged to bring the right-wing parties and United Torah Judaism into the fold, the promises made in exchange of their support would likely add another NIS 2b. or NIS 3b. to the budget. However, the cost would be about the same in the third scenario, whereby the current members of the coalition engage in horse trading prior to approving the budget. For now, at least, "apparently funding the 2007 deficit will not be a problem," Leader said, but noted that the Treasury has yet to release details on how funding for the deficit would be divided. A deficit target of 2.9 percent of GDP translates into NIS 17.5b., but subtracting net revenues of NIS 3b. would leave a funding deficit of about NIS 14.5b., Leader noted. Next year, the privatization of the Haifa oil refinery will bring in about NIS 6.5b., while a further sale of Bank Leumi stock is expected to bring the government another NIS 2.5b., while the remaining NIS 5.5b. would come from domestic and foreign fund-raising, Leader noted. On the assumption that the oil refinery is indeed sold - which the Treasury estimates is a 75% chance - "the demon is not so terrible," with large-scale privatizations facilitating domestic fund-raising, Leader said, adding that a "big" revenue surplus of NIS 17b. is expected on the bond market. Leader also noted that the Treasury's 2007 budget proposal was based on a "conservative" estimate of tax revenue to be collected next year, itself the product of a conservative 3.8% forecast for 2007's economic growth, against Leader's estimate that the GDP will expand 4.1%. Maoz said he expected the economy to grown 3.7% in 2007. Separately, the Finance Ministry confirmed that a total of NIS 1.41b. was added to the budget before the government passed it, but stressed that the sum would not be borne by an increase in current spending, but would instead be taken from reserves and from funds originally intended to help the North recover. The bulk of the original NIS 3.85b. in cuts made to meet fiscal goals - including cuts to welfare spending, railway development and most postponements of coalition agreements - remained in place, the ministry said. As such, the budgetary spending growth cap of 1.7% will be maintained - alongside one-time military costs tacked on outside of current spending - and the deficit target remains at 2.9% of GDP. Education received NIS 80m., plus another NIS 280m. for schools in the North; culture received another NIS 40m.; local authorities were allocated NIS 130m. more for development budgets and NIS 200m. for financial rehabilitation programs; NIS 200m. more was given to the police and Prisons Service; NIS 150m. more to developing the Negev; NIS 110m. more for aliya absorption; NIS 45m. more for public housing; NIS 50m. more for the Agriculture Ministry; NIS 70m. more for tourism; and NIS 55m. more for the pensioners, the Finance Ministry said. However, a planned NIS 212m. increase in funding for the Chief Scientist's Office in the Ministry of Industry, trade and Labor was reduced to NIS 62m., and NIS 150m. in coalition promises to Shas were postponed to 2008, the ministry said.