In spite of Prime Minister Benjamin Netanyahu's failure to approve the Trajtenberg committee's recommendations at the cabinet meeting on Monday, Minister of Finance Yuval Steinitz promised this morning that the government would ultimately adopt the Trajtenberg committee report. "The government will not miss the opportunity to implement these amendments, and in the end the report will be approved. All of the coalition parties will be contacted, and since this step is important, we will reach a majority," Steinitz told the Economic Policy Planning Forum at Haifa University.
On this topic, Steinitz spoke about the necessary cuts in the defense budget, and announced, "These are well considered cuts. When there were cuts in the past that hurt the IDF, I was the first to suggest adding to the defense budget, such as following the second Lebanon war." Subsequently, Steinitz noted that the defense establishment has received an additional NIS 5 billion in the last four years. "I once told Minister of Defense Ehud Barak in jest that he is the most expensive minister of defense Israel has ever had, exceeding the budget by NIS 20 billion. Trajtenberg recommends that we go back to implementing the Brodet report," he said.
Steinitz continued, "If we exceed the budget, then we need to go back and restructure it, and that is why transparency is so important and critical. We are not talking about cuts, but decreasing the huge excess of the last four years, where each time the defense establishment requested more - and received it - beyond the NIS 100 billion that the Brodet report concluded that the defense establishment needs to receive."
The Minister of Defense's office declined to comment.
Irresponsible babble
Steinitz defended the Trajtenberg report, claiming that the adoption of its recommendations would save households thousands of shekels a month. "Take, for example, a couple with children 2-4 years old, where the father makes NIS 8,000 net a month and the mother NIS 3,000 net. As a result of negative income tax for women, the man's credit points, free education, and a longer school day - all these together add up to another NIS 2,000 a month for the family. This is significant assistance, and we still have not talked about the recommendations that will lead to a lowering of the cost of living in Israel, and the lowering of a large number of products," Steinitz said.
"Trajtenberg is making significant social and economic changes. We are the only western country that is able now to talk about these types of changes. You will not hear about such large additions in the UK, Spain, Germany, Sweden, Canada, the US, Japan or any other western country. The only reason we are even able to adopt such recommendations that are already costing billions of shekels, is because we are one of the few countries in the world that have succeeded in surviving the economic crisis and returning to a relatively high level of investment," Steinitz added.
In response to the deterioration of the world economic situation and the slowing of growth in Israel, Steinitz said, "There has been a fall in Israeli exports in the last three or four months as a result of the crisis in Europe, and this is worrisome. We are trying to stop the trend. As the Minister of Finance, this concerns me. We have successfully diverted exports from the west to emerging markets in India, China and South America. We cannot escape the global economy, but it is great that the Israeli economy has succeeded in dynamics in a time of crisis."
Steinitz even warned about breaching the budget during this period and said, "This is irresponsible talk" and that, "If we alter our behavior and we breach the budget, we will fall immediately, within a few months. The rating organizations will also lower our rating. If we lose out on foreign investment in Israel, then everything will fall apart."
Published by Globes [online], Israel business news - www.globes-online.com - on October 5, 2011
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