Finance committee approves NIS 2 billion cut to fund war

The vote had been postponed three times before, mainly due to Labor MKs' staunch opposition to proposed cutbacks.

The Knesset Finance Committee on Wednesday approved by a slim margin the Treasury's planned NIS 2 billion cuts in ministerial budgets to fund the war in the North. The vote, which came 10 to 9 in favor of the cuts, had been postponed three times before, mainly due to the Labor Party representatives' staunch opposition to the proposed cutbacks. Just minutes before the voting, the three Labor party MKs Shelley Yachimovich, Orit Noked and Avishay Braverman, who were against the cuts, were replaced with Yoram Marciano, Efraim Sana and Michael Malchior. The three rebel Labor MKs had demanded that Finance Minister Avraham Hirchson take the funds from the NIS 13b. in budget reserves instead of cutting the budgets of cabinet ministries. Braverman last week threatened that if Hirchson did not agree to his demand, he would vote against the cut and prevent it from passing. "I support the democratic rule but from a professional conscientious point of view I am against the cut," said Braverman upon leaving the finance committee meeting just minutes before the vote. "The vote is not relevant and has no significance as the government intends to increase expenditure." The approval coincided with Wednesday's release of the National Insurance Institute's 2005 poverty report, which revealed that, for the first time, the number of poor in the country exceeded 1.6 million. Chairman of the Knesset Finance Committee Yaakov Litzman, who voted against the budget cut, said the vote was very significant and would hurt the weaker segments of the population. MK Avigdor Yitzchaki, chairman of the coalition of Kadima, said the coalition could not continue to work in this form and would have difficulties passing the budget for 2007 if the relationship between the members did not improve. Ministry of Finance Budget Director Kobi Haber, who attended the meeting instead of Hirchson who was ill, strongly defended the position that the Treasury had breached the budget deficit framework and acted against the law. "There will be no breach in the spending limits in the 2006 budget," said Haber. "We were lucky to enter the fighting with a large income surplus of about NIS 10b." Agriculture Minister Shalom Simhon disclosed in the meeting that the price the agriculture sector had to bear from the repercussions of the war had reached half a billion shekels. Separately, United Jewish Communities, the Federations of North America said it raised NIS 20 million to offer emergency assistance to thousands of small businesses in the North that suffered severe financial distress as a result of the fighting. Grants of between NIS 2,000 and NIS 4,000 will be granted to each small business. The initiative is part of the Jewish Agency's effort to raise money across Jewish communities worldwide. Since the beginning of the war, the Jewish Agency has raised NIS 200m to help residents in the North.