Industry gets assurance on budget

Olmert tells Manufacturers Association of Israel that 2007 budget will work to their benefit while bringing focus back to social welfare programs.

hirchson 88 298 (photo credit: Ariel Jerozolimski)
hirchson 88 298
(photo credit: Ariel Jerozolimski)
Prime Minister Ehud Olmert and Finance Minister Avraham Hirchson provided assurances to Israel's industry leaders that the 2007 budget would work to their benefit while bringing the focus back to social welfare programs. "Next week, the budget will pass," Prime Minister Ehud Olmert told the annual meeting of the Manufacturers Association of Israel in Tel Aviv Thursday. "It is a budget that is balanced, correct and upholds all the parameters that we established to continue the improvement and strengthening of the economy." Olmert's comments came after the Knesset Finance Committee passed the NIS 283 billion 2007 budget and the accompanying Economics Arrangements bill on Tuesday, making it likely the budget will pass "on schedule," for the first time in about four years, when the Knesset votes for its passage next Wednesday. The most significant increase in the budget went to security matters as the Defense Ministry will see a rise of NIS 1.9b to total NIS 52.34b. "The defense budget will enable Israel to take care of all the things that it needs to in order to function properly," Olmert said. With the defense increase out of the way, Finance Minister Hirchson said the social agenda would dominate government activities next year. While social programs were billed to be the focus of any budgetary discussions until the war in Lebanon diverted the country's spending needs towards security issues, both Hirchson and Olmert highlighted a NIS 2.9b. increase given to social programs in the current budget. These include an additional NIS 200 million allocated to aid children at risk, NIS 237m. more for the medicines basket, an increase of NIS 70m. for shelters and an extra NIS 561m. for welfare programs. "Reducing social gaps will be of great significance in the government's agenda in 2007," Hirchson said. "The program will work to encourage those who can work to do so and help segments of the population who cannot work." As part of his program to encourage participation in the work force, Hirchson told the gathering he intends to present his program for negative income tax for implementation immediately after the budget is approved. "This is not a simple matter," he stressed. "[This program's] costs are high and it is complicated to carry out and it is very difficult to implement." Meanwhile, as Manufacturers Association president Shraga Brosh appealed to the government to strengthen its incentive programs for investments in industry and research and development, Hirchson gave his assurances this was on the agenda. "It's important that you know that we intend to focus on encouraging investments in 2007 and as a government we will continue to invest in human capital," Hirchson told the industrialists. "Industry generates change in the local economy by creating jobs, infrastructure, and bringing greater income to the country. It is my intention to help generate the necessary changes that are expected to achieve this."