Gov't approves proposed budget

Labor, Shas vote against; Sa'ar criticizes budget; Kadima, Meretz to file no-confidence motions.

Netanyahu cabinet meeting 248.88 (photo credit: AP)
Netanyahu cabinet meeting 248.88
(photo credit: AP)
The rhetoric surrounding the budget heated up Sunday, with key ministers opposing their own government's draft and Kadima announcing that it would submit a no-confidence motion on the government's economic policy immediately with the opening of the Knesset summer session on Monday. Kadima said former finance minister Roni Bar-On would present the no-confidence motion, entitled "the appointment of hundreds of cronies to positions of 'Nothing Affairs' in an inflated government during a period of serious economic cut-backs." But Bar-On might recognize the uncomfortable situation facing current Finance Minister Yuval Steinitz, after ministers from coalition parties Labor and Shas voted against the budget that Steinitz presented Sunday in the weekly cabinet meeting. The same two parties - then part of the Kadima-led coalition - voted against Bar-On's budget during the Knesset's summer session last year. All told, 20 ministers voted during the meeting in favor of the Finance Ministry's biannual budget proposal, while 10 ministers voted against it. Shas and Labor argued that the budget had to be increased in order to deal with the financial crisis. Defense Minister Ehud Barak explained that Labor opposed Steinitz's proposal for a target national deficit of 6%. "We must increase government spending and the national deficit in order to face major challenges, both in the economy and in defense," Barak said. Welfare and Social Services Minister Isaac Herzog (Labor) also said that his party would oppose the proposed budget. "The budgetary framework must be broadened in order to deal with the challenges we are facing," he said. Finance Ministry budget czar Ram Belinkov presented the plan, which includes broad cuts in government spending, with ministries forced to cut a total of NIS 14 billion shekels, cuts that would take effect in 2010. The plan aims to stave off an increase in the state deficit which, due to a drop in tax revenues, currently stands at NIS 46 billion a year for the next two years. Should the two-year budget be approved, the budget will be increased by 1.7% annually, putting the 2009 state budget at 243 billion shekels and the deficit at 3% of the gross domestic product (GDP). Belinkov also presented his ministry's plan to reduce the deficit to 1% by 2014. At the start of the cabinet meeting, Prime Minister Binyamin Netanyahu urged ministers to pass a "serious" budget. "If we approve a serious budget and act responsibly we will be able to get the country out of the financial crisis," Netanyahu said. "Today we are beginning the process of approving the national budget in the midst of a very difficult international crisis. We are feeling the crisis and will feel it even more in the future. Tens of thousands of people have been fired and thousands more fear they might be cut. "We must do all we can to stop unemployment and meet important needs such as defense and education. It will not be easy, it will be hard. I believe that if we pass a serious budget we will be able to get the country out of the crisis and meet additional needs," the prime minister said. But criticism of the budget was not restricted to fractious parties within the coalition. Education Minister Gideon Sa'ar (Likud) also voted against the budget, expressing concern that the current plan would harm Israel's weaker sectors. "To deal with the complex implications of the financial crisis we cannot support a policy that hurts the weaker classes. This is not a political matter," Sa'ar said. "There's no way we can cut the education budget, it would be a grave mistake. I'm sure education is a top priority for Israel's government and that that the government will not hurt the education system but will strengthen it. "My opposition to the budget is based on what almost all of the advanced countries in the world do, when they invest large amounts of resources in education," said Sa'ar later, in an interview with Army Radio. Sa'ar added that he would also continue the struggle to make sure that child-care expenses remain deductible expenses for working parents, as the Supreme Court had ruled last week. The Finance Ministry has expressed concern that that the precedent upheld by the court will put the government even further into debt. Outside of the coalition, criticism of the budget was rampant. Meretz Chairman MK Haim Oron said that "once again, it has been proven that election promises have no real coverage on the morning after. "The opposition of Shas and Labor, who both knew perfectly well that Bibi is the same Bibi when they agreed to sweet deals in the coalition agreements - is no more than a farce." Labor rebel MK Ophir Paz-Pines also blasted the budget, saying "everything we said in opposing joining the coalition was proven today - and how! Labor ministers have no influence in this government. All of the Labor's promises about increasing the budget disappeared at the moment of truth as if they had never existed." Netanyahu's opponents will take center stage Monday afternoon at the opening the Knesset's summer session. In addition to Bar-On's no-confidence motion, Meretz is also set to attack the economic policy, with a motion entitled "the government's economic program and the cuts buried within it." Three other no-confidence motions, all submitted by Arab parties, deal with the coalition's foreign policy.