Cabinet approves 1% budget cuts of gov't ministries

Budget cuts pass 19-7 in cabinet, will lower public transportation costs 10%; Israel Beiteinu, Limor Livnat, Silvan Shalom oppose measure.

yuval steinitz 311 (photo credit: Ariel Jerozolimski)
yuval steinitz 311
(photo credit: Ariel Jerozolimski)
The cabinet on Sunday approved one percent budget cuts for government ministries proposed by Prime Minister Binyamin Netanyahu and Finance Minister Yuval Steinitz.
Nineteen ministers voted in favor and seven against the proposed initiative.
RELATED:Israel Beiteinu to oppose budget cuts proposed by PMTerrific growth figures don’t tell the full storyMofaz demands explanations before okaying defense fundsThe cabinet also froze for one year the cut in the income tax for the top two deciles to finance the rescinding of the hike in the gasoline excise. The cabinet also approved a 1% across-the-board cut in ministries' budgets, with the exception of the Ministry of Defense, the Ministry of Education, and the Ministry of Social Affairs, in order to finance public transport subsidies.
Likud Minister of Sport and Culture Limor Livnat and Minister of Galilee and Negev Development Silvan Shalom, as well as Israel Beiteinu ministers opposed the budget cuts.
The cabinet instructed the Ministry of Finance to review freezing the cut in the companies tax by one year, or some other change in the tax regime to preserve the budget balance in 2011-12.
The tax and other concessions by Netanyahu and Steinitz have created a NIS 300 million fiscal hole. The cut in ministries budget will cover NIS 150 million of the shortfall, and another NIS 150 million will be filled by cutting the Ministry of Transport's budget for intercity road development.