New budget to extend ‘cash for clunkers’ program

Continuing program through rest of year crucial to curb air pollution, reduce roadside accidents.

cars 311 (photo credit: Ariel Jerozolimski)
cars 311
(photo credit: Ariel Jerozolimski)
In response to a request from the Knesset Finance Committee this morning, the Finance Ministry agreed Monday afternoon to increase the budget of the nation’s vehicle-scrapping program, although the exact amount has yet to be determined.
Finance Committee chairman Moshe Gafni (United Torah Judaism) had requested during a committee meeting that the government issue an additional NIS 20 million to extend its scrapping program, which allows people with very old cars to trade in their vehicles for cash. Due to the program’s high demand, the funds for 2012 have already been recently depleted, and continuing the program through the rest of the year is crucial to curbing air pollution and reducing roadside accidents, according to Gafni.
For 2012, the Finance Ministry had allocated NIS 18 million for the program, with an intention to renew the budget in 2013.
Eyal Epstein, the deputy chairman of the Finance Ministry’s Budget Division, said that the new budgeting will occur in the coming weeks, after the Environmental Protection Ministry brings forward the relevant proposal for government approval, according to the committee.
“In light of the successful experience of the program, it is necessary to renew it immediately,” Gafni said.
“The reduction of old vehicles contributes to traffic safety, prevents air pollution and contributes to the state budget, due to a surplus purchase of new cars and the increase in state tax revenues.”
Gafni stressed that the state earns in three different ways from scrapping vehicles.
Amir Zalzberg, of the Environmental Protection Ministry’s Air Quality Division, backed up Gafni’s calls for an additional budget to get more gas-guzzling vehicles off the road. The program was initially designed in order to take vehicles over 20 years old off the road, as they are 20 times more pollutant than newer vehicles and lack catalytic converters, Zalzberg explained.
Owners with valid licenses for such vehicles receive NIS 3,000 for their cars directly into their bank accounts, and some of the materials are recycled for future use, he added.
So far, Zalzberg noted, the program has had a budget of nearly NIS 80 million, but in both August 2010 and late 2011, the trade-ins had to be suspended due to depletion of funds.