“Every additional shekel in state revenue will go to reduce taxes, not to increase the budget framework or spending,” Minister of Finance Benjamin Netanyahu declared today. Prime Minister Ariel Sharon and most of the government ministers, some from the Likud party, are backing Netanyahu’s measures, particularly his decision to lower VAT, purchase taxes, and customs duties. Sharon stated that the economy was improving, and was on the road to growth. “Our economic situation is getting better. Israel will achieve good, positive growth in 2004,” Sharon said.
In addition to cutting taxes, Netanyahu will propose to the government a further NIS 2.5-3.5 billion cut, through an across-the-board 5% cut in all ministerial budgets, including the Ministries of Education, Health, and Defense. A number of concessions may nevertheless be made in the proposed cuts in welfare, education, and health.
The ministers, particularly those responsible for social issues, are preparing to combat the proposed cuts. Minister of Labor and Social Welfare Zevulun Orlev, who met with Netanyahu today, threatened to resign. He said that Netanyahu’s measures were ‘An earthquake rating 10 on the Richter scale.”
Minister of Health Dan Naveh believes he can prevent the additional cut, mostly by reducing the defense budget supplement. Minister of Education Limor Livnat warned that the proposed cut would require a shorter school day, with classes ending at 11 AM.
Netanyahu added, “More people are working, and they are paying more taxes. We could have left the money in the state treasury, and reduced our debt, but I believe in giving it to the people. I’m telling them ‘Buy whatever you want: rice, noodles, margarine, sugar, eggs, sesame, soap, or shaving cream.’ To poor people, I say, ‘You’ve earned what you have honestly take the money.’”
Published by Globes [online] - www.globes.co.il - on February 12, 2004