Prime Minister Benjamin Netanyahu has decided to cancel the budget cuts at various ministries totaling NIS 141 million in exchange for the support of the Shas and Ehud Barak's Ha'atzmaut party in the fiscal package he is preparing for the Ministry of Finance.
Following agreements reached this morning with the Ministry of Finance, Shas ministers are expected to lend their support in the Knesset to the economic austerity measures approved two days ago in the cabinet. In the wake of talks between Minister of Finance Yuval Steinitz and Minister of Interior and Shas chairman Eli Yishai and parallel talks between Deputy Finance Minister Yitzhak Cohen and the director generals of the Ministries of Interior, and Housing and Construction, it was decided to almost completely cancel the cuts at the those two ministries.
The Ministry of Interior had been due to see a NIS 41 million cut, which is now completely cancelled, while at the Ministry of Housing and Construction proposed cuts in social spending including for public housing and rent subsidies for the needy have been cancelled. In addition an extra budget of NIS 60 million for local authority recovery plans has been approved. In exchange, Shas will vote today in favor of the economic austerity plan in the Knesset Finance Committee as well as next Monday in the Knesset plenum.
Another "gift" given to Shas is the cancellation of the across the board cut at the Ministry of Housing and Construction, which would have hit public housing and rent assistance in urban renewal neighborhoods.
Netanyahu also decided to give back the cuts at the Ministry of Defense that the Ministry of Finance had decided to cut as well as cancelling the budget cutbacks on home defense, as well the Ministry of Industry, Trade and Labor's technology education, and daycare centers budgets. These rescinded cuts total about NIS 100 million and in exchange Ehud Barak's Ha'atzmaut party will support the fiscal package.
Published by Globes [online], Israel business news - www.globes-online.com - on August 1, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012