Knesset Finance Committee chairman MK Moshe Gafni (United Torah judaism) estimates that the 2017-2018 state budget will pass its first reading this week, probably on Wednesday night.
The 2017 budget will be NIS 359.7 billion and the 2018 budget will be NIS 376.7. Real growth in the state budget between 2016 and 2018 is forecast to be 8.3%, while real growth for 2017 is forecast to be 5.2%, compared with 2016. The deficit target for 2017-8 is expected to be 2.9% of GDP.
The Ministry of Finance says that the principles of the budget are based on a just division of national resources, tackling the housing crisis, lowering the cost of living, encouraging growth, and improving productivity.
In a hearing in which the budget was presented to the Finance Committee, Minister of Finance Moshe Kahlon said, "we opened the meat and fish market for import and these are not easy measures. When I have seen all the protests, pressures and attacks I understood why this was not done before me. Some people get frightened and some consider whether it is right to pay NIS 17 for an unripe tomato. I think that this year, they paid NIS 4 for a ripe tomato. After all, there are 8 million people here and someone should at least try and help them.
"It is not a secret that gaps have increased in the past few years. When I arrived at the Ministry of Finance, we had the cost of living crisis, the housing crisis, the corporation crisis - I came to these crises and I do not shy away from them. I came to solve them; I did not create these problems. There are some reforms that Knesset members from the opposition said they will support because they are social reforms that are beneficial for the people - so I thank you, we might need this."
Some of the measures presented by Kahlon included: the direct employment of contract workers, infrastructure development in the Arab sector and Buyer Fixed Price, which Kahlon said is expected to reach 12,000 apartments by the end of the year.
Kahlon presented figures indicating that the health budget will grow by NIS 5 billion this year, including a permanent NIS 500 million addition to the health services basket, which will be added to the budget base; the education budget will increase from NIS 55.2 billion to NIS 55.8 billion in 2018; the welfare budget will increase from NIS 6.5 billion to NIS 7.4 billion in 2018; Project Renewal urban renewal program budget will grow from NIS 90 million to NIS 160 million.
In terms of growth encouragement measures, Kahlon mentioned the lowering of corporate income tax to 23% and income tax decrease for the middle class. The overall annual budget for R&D and investment encouragement will be NIS 3 billion over the next two years and will also include a NIS 40 million addition for the encouragement of small and medium-sized businesses, a NIS 500 million addition in 2017 and a NIS 750 million addition in 2018 to the higher education system; an addition of NIS 70 million in 2017 and NIS 125 million in 2018 for beefed-up qualifications of engineers for the high tech sector; and an NIS 100 million addition to the firefighting services' budget, which will enable the cancellation of fees for the Israel Fire and Rescue Services in the licensing of businesses.
Published by Globes [online], Israel business news - www.globes-online.com - on October 31, 2016
© Copyright of Globes Publisher Itonut (1983) Ltd. 2016