Cabinet okays 2011-12 draft state budget

NIS 2.7b. cut in defense spending to go toward education, social needs.

Yuval Steinitz 311 (photo credit: Ariel Jerozolimski [file[)
Yuval Steinitz 311
(photo credit: Ariel Jerozolimski [file[)
The draft state budget for 2011-2012, which was approved on Friday by the cabinet, seeks to give priority to education, health and welfare.
It still needs to be passed by the Knesset.
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“The budget we have been presented is a responsible and balanced budget that grants stability to the Israeli economy for the next two years,” Prime Minister Binyamin Netanyahu said on Friday following the vote. “We are not deviating from the budgetary parameters we have set, which is very important from a national and international perspective for the economy.”
“Naturally, we can’t meet every need, even though many are legitimate and important, but a leader’s job is to weigh priorities and make decisions,” he added. “The budget balances between educational, social and security needs.”
Following a night-long debate, the cabinet approved the budget with 20 ministers voting in favor. Five Israel Beiteinu ministers voted against, four Shas ministers abstained and one Labor minister was absent as Welfare and Social Services Minister Isaac Herzog left the meeting early in protest of a decision to freeze a planned increase in child benefits.
Until the late hours of Thursday night, Netanyahu mediated between Finance Minister Yuval Steinitz and Defense Minister Ehud Barak to come to an agreement over the demanded cut in defense spending.
Instead of increasing the defense budget by NIS 6.2 billion, it will only be raised by NIS 3.5b. over the next two years. The Finance Ministry said that the NIS 2.7b. cut in defense spending growth will be transferred to education and social budgets.
“The government approved a professional budget, which balances the different needs of the market,” Steinitz said.
“After years in which the security budget received significant additions, which strengthened the military, the government has chosen to give these additions to the education budget, health, welfare and advanced technologies.”
“My mission is for economic growth in the coming years to narrow social gaps and strengthen the weaker sectors through a national application of negative income tax,” he said.
Steinitz added that the 2011- 2012 budget will allow the government to plan for the long-term and strengthen the stability and security in the market, while continuing to diligently protect the security of the state.
If the draft budget is approved by the Knesset, spending will increase in real terms by 2.7 percent in 2011 and 2012 compared with 1.7% in previous budgets. The planned deficit is 3% in 2011 and 2% in 2012.
“We made a difficult decision, taking into consideration the economic and social situation in Israel,” Barak said.
“There are consequences to this decision, and I presented them to the cabinet.”
Barak added that he hopes the IDF can “stand before the challenges in the resources budgeted to us. The balance between the security budget and the other budgets can bring us to deal correctly with the security and social challenges in Israel.”
As part of the budget agreements, the retirement age for military personnel – who are not technical specialists or combatants – would be raised to 50. Currently, the average retirement age for IDF career officers is 42.
It was also agreed that NIS 1.4b. will be allocated to the Transportation Ministry and NIS 55 million to the Culture Ministry over the next two years. The budget for the Education Ministry will be increased by NIS 3b. over the next two years.
“The addition does not provide a full answer to the needs and problems in the education system,” Education Minister Gideon Saar said. “However, it is an important step in the right direction. The decision indicates an approach that investment in education and higher education is the key to the future of Israel.”
Jerusalem Post staff contributed to this report.