Industry sets agenda for budget priorities

Economists have said they see no reason for the 2008 budget cuts as the current economic situation in the country is strong.

roni bar on 88 298 (photo credit: Ariel Jerozolimski)
roni bar on 88 298
(photo credit: Ariel Jerozolimski)
Ahead of today's critical budget meeting between Prime Minister Ehud Olmert and Finance Minister Ronnie Bar-On, the country's manufacturing leaders called on the government to preserve and increase Israel's ability to compete in the global marketplace as well as narrow the wide social gaps currently dominating Israeli society. Industry, Trade and Labor Minister Eli Yishai met earlier this week with Shraga Brosh, chairman of the Manufacturers' Association of Israel, Gavriel Maimon, director-general of the Industry, Trade and Labor Ministry, David Artzi, chairman of the Israel Export Institute and several manufacturers in an effort to prioritize the most urgent needs of the country's industrialists in 2008. "We intend for the government to rearrange its order of preference when considering the 2008 budget," said Yishai. "There are a few critical points that the government must not ignore when computing the budget, including Israel's ability to withstand increased economic threats from other countries, the country's high unemployment numbers and preference should also be given to Jerusalem, the Galil and the Negev." According to Yishai, the government must allocate more funds for biotechnology and nanotechnology research, for business sector research and development projects, for the encouragement of foreign investments and for an increase in the work force. Additionally, Yishai called on the government to increase the budgets in Jerusalem, the Negev and the Galil in order for these areas to improve their education systems and build up their respective work forces. Bar-On wants to make significant cuts to the proposed budget to help compensate for increases in spending on defense, education and social welfare that are expected to be introduced. Ha'aretz reported Tuesday that the ministry and the Bank of Israel are hoping to limit total increases in spending next year to 1.7 percent, but that Ra'anan Dinur, director-general of the Prime Minister's Office, believes spending should be reined in even further. Economists, meanwhile, have said they see no reason for the 2008 budget cuts as the current economic situation in the country is strong, although some speculated that the cuts are intended to free up cash in case it is needed in the future or that they may just serve as a warning from the new Finance Minister that he will not be giving more money to the various parties. Following today's meeting between Olmert and Bar-On, the government will next meet again a week from Sunday at which the budgets of all government ministries will be set, the Finance Ministry said.