Cabinet approves 2015 budget after stormy session

Peretz sole dissenting vote, calling it a plan born from political deals; Treasury promises significant increase to Health Ministry

By NIV ELIS, JUDY SIEGEL-ITZKOVICH
Finance Minister Yair Lapid (R) sits across from Prime Minister Binyamin Netanyahu at the cabinet meeting in Jerusalem. (photo credit: REUTERS)
Finance Minister Yair Lapid (R) sits across from Prime Minister Binyamin Netanyahu at the cabinet meeting in Jerusalem.
(photo credit: REUTERS)
The cabinet approved the plan for the 2015 budget in a stormy, late-night session Tuesday, with only Environmental Protection Minister Amir Peretz voting against.
“This is not a budget that was born through in-depth analysis; rather, it came from political deals,” said Peretz, who was also the lone dissenter in the 2013-2014 budget, on Tuesday.
“These are new politicians that adopted all the old methods of theft, methods that are meant to strengthen the strong and weaken the weak.”
Finance Minister Yair Lapid argued the budget had a strong social agenda, and worked to rebuff sharp criticism from the Bank of Israel on the plan.
“The budget that was approved is a responsible budget, which addresses the immediate needs of the Israeli economy, but does not forget to also build a long-term, growth-oriented economic policy,” he said.
The Finance Ministry set the deficit target for the NIS 328 billion budget at 3.4 percent of GDP, but as the cabinet met Tuesday, the Bank of Israel issued a harsh statement calling the ministry’s calculations and assumptions into question. By its own calculations, the deficit for the year would come out at 3.6%. Both figures are well above the 2.5% limit BoI recommended to keep Israel on a path of debt reduction.
Budget director Amir Levy promised that from 2016 on, the budget path would move back toward debt reduction.
But according to BoI, the current plan would pave the way to a 3.4% deficit in 2016, far above the 2.75% the Finance Ministry laid out in its debt reduction plan.
Only a handful of ministers stayed until the 1:30 a.m. vote; While Lapid, Prime Minister Benjamin Netanyahu, Welfare and Social Services Minister Meir Cohen, Justice Minister Tzipi Livni and Senior Citizens Minister Uri Orbach stuck it out, the rest recorded their votes earlier on and left, Globes reported.
Minor changes were introduced into the budget plan before it passed, such as the cancellation of an increased fee for issuing passports, and a NIS 300 million tax benefit that would be postponed until 2016. Toward the end of the negotiation, a plan to reduce funds for technical colleges was reversed, according to the Economy Ministry.
Labor MK Eitan Cabel mocked the budget plan, saying it would make life more difficult for Israel’s citizens.
“This is a budget that, perhaps, is appropriate for the Purim holiday, not for Succot,” he said Wednesday. The government, he added, gave Israelis an “anti-social budget.”
The Health Ministry is one of the few promised significant additional funding in the 2015 budget, but the financial blanket still remains too small to cover the bed of health needs.
The ministry announced on Wednesday afternoon that the Treasury agreed to allocate NIS 3.176 billion more for the health system next year, “an impressive addition to the budget... following long discussions between the Finance and Health ministries.”
The addition “constitutes 35% of the addition to the budget, and this is an impressive accomplishment,” said Health Minister Yael German.
“This is the second-highest addition after defense system and stresses the great important of the health system.”
Listing the uses for the additional money, German named the NIS 315m. already promised by Lapid to carry out recommendations of the German Committee to Strengthen the Public Health System, specifically to shorten queues for medical procedures in the public hospitals by adding manpower, beds and equipment. In 2016, this amount will grow to NIS 700m. and become a permanent addition to the health budget.
In addition, the ministry will receive NIS 285m. to implement the decision of the government to turn over its responsibility for psychiatric care to the health funds – a proposal made by the Shoshana Netanyahu Commission to Reform the Health System, which goes back nearly a quarter century but was never implemented. Health fund mental health clinics will be expanded and 185 psychiatric beds will be added to mental health centers.
The basket of medical technologies will get the same additional NIS 300m. for new drugs and techniques – the same it has received every year for some eight years – not the NIS 600m. or more recommended by experts in the field. The four public health funds will get NIS 250m. more due to demographic indices, but they and the public hospitals nevertheless remain deep in deficit.
The ministry said it would also receive NIS 100m. more to “narrow health gaps in sectors suffering from social and health gaps,” but details have not yet been worked out. A total of NIS 40m. will be spent to repair and improve the infrastructure of decrepit and neglected psychiatric facilities to improve the treatment and quality of life of patients and their families. In addition, NIS 10m. will go toward implementing a national program for stroke prevention and treatment, with more information, hospital equipment and training of staffers and opening rehabilitation of stroke victims in the committee.
The Treasury also allocated NIS 18m. for the national suicide prevention program and NIS 145m. for development of health facilities.
Health Ministry director- general Prof. Arnon Afek told The Jerusalem Post in an interview on Wednesday that he was very pleased with the results of the budget negotiations.
“I spoke to the professionals there, and they understood the needs,” he said. “In the future, the money for the state hospitals will go to the new national hospital authority that is being formed, taking over responsibility for the state medical centers.”
He added that he and his colleagues have three months to prepare a plan for allocating money for reducing the gaps in the health system. He conceded that more money is needed for the hospitals and health funds, and that no funding was found to restore to the ministry responsibility for the mostly privatized School Health Service and well-baby (tipat halav) facilities.