Widespread disapproval from the Labor and Shas parties forced Finance Minister Avraham Hirchson to delay the publication of the 2007 budget Monday, after leaked details were found "unacceptable" by those parties. Rather than presenting the budget at a 2 p.m. press conference, the finance minister locked himself in a room with key ministry officials to try to alter the budget to reflect "stronger socioeconomic values."
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Officials in the ministry said Prime Minister Ehud Olmert had called Hirchson and said he would not allow the coalition to be torn apart by the budget, and ordered him to find a way to make the budget presentable to Labor and Shas.
Among the contested issues was a cut in child allowances, a delay in raising the minimum wage, and a 50 percent hike in tuition fees for university students.
Several senior cabinet ministers from the Labor Party threatened to vote against the budget if the social clauses of their coalition agreement were not honored. When Labor joined the coalition, one of their primary demands was their election promise that the minimum wage be raised to $1,000 per month.
"The treasury's cutbacks represent damage targeting those who carried the war on their shoulders: soldiers and students," said Labor Faction Chairman Ephraim Sneh.
Agriculture Minister Shalom Simhon announced that he would step down from his post and Labor would leave the government if the budget were not changed. Shas Chairman Eli Yishai threatened to leave the coalition if the cuts in child allowances were not reversed.
"Any damage to the allowances will cause us to vote against the budget and leave the coalition," said Yishai.
The Finance Ministry explained it needed to cut from social welfare programs to fund the increased military budget. However, Defense Minister Amir Peretz, chairman of the Labor Party, said they would find it unacceptable if military costs came at the expense of the social welfare of Israel's masses.
"The Defense Ministry's budget increase is exaggerated. The defense budget has to be reevaluated from the top," said MK Danny Yatom (Labor). "The budgets of education and development should not be affected by the defense budget. The Finance Ministry has a surplus of money, which could be used for urgent needs."
After the war, the defense establishment demanded an increase of NIS 29.8 billion to its budget.
Some, including Labor MK Shelly Yacimovich, suggested the budget presented by the government was meant to shake up the coalition.
"Kadima wants us out of the government. There is no other explanation for this plan," said Yacimovich.
Sources in the Finance Ministry denied her accusation, stating that they would not be working overnight to revise the budget if they did not intend to keep Labor in the coalition.
Meanwhile, a senior Kadima MK retorted Yacimovich's statement by stating that Labor's reaction to the budget was a deliberate attempt to cause a coalition crises.
"That party is disintegrating under Peretz's feet and he is desperately trying to bring it together under the budgetary flag," said the MK.