Government passes budget

After an all-night session, the government passed the budget, with some changes, by a majority of 20 to 1.

After an all-night session, the government passed the economic plan for 2013-1014 by a majority of 21 in favor and one against.

The plan includes a historic decision to enforce study of the core curriculum throughout the education system; a welfare-to-work program, and an array of incentives to encourage employment and expand the workforce; a cut in child allowance, and cancellation of child allowance payments to those earning over NIS 800,000 a year; implementation of the Kedmi committee recommendations for reducing food prices; a war on the shadow economy; and cuts in salaries for ministers and members of Knesset.

In addition to the NIS 3 billion cut to the defense budget decided upon yesterday, it was also decided not to abolish the VAT exemption for tourism services as originally planned, but instead to raise companies tax by a further 0.5% (1.5% in total).

There will also be a 2% across the board cut in government spending in 2013, and a 3% cut in 2014, except for defense and welfare, amounting to a total of NIS 1 billion.

Minister of Finance Yair Lapid said at the end of the government meeting, "Approval of the 2013-2014 budget is the first stage in a change in Israel's way of life. The law for sharing the burden of military service, civilian service, and economic activity equally will shortly come before the government, and the housing cabinet will start to implement a national housing plan that will lead to a fall in home prices. The budget will be accompanied by a package of measures including the imposition of taxation on the giant companies that pay near zero tax on their profits, and the formulation of reforms through dialogue with the Israel Electric Corporation and the ports.

Published by Globes [online], Israel business news - - on May 14, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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