Cabinet Approves Budget After All-Night Session

Israel’s Prime Minister Binyamin Netanyahu (C) holding a cabinet meeting during a day of wearying negotiations over the state budget. (REUTERS/Dan Balilty/Pool)
Israel’s Prime Minister Binyamin Netanyahu (C) holding a cabinet meeting during a day of wearying negotiations over the state budget. (REUTERS/Dan Balilty/Pool)

It took all day and all night, but at nearly 4 a.m. Thursday, the Israeli cabinet finally approved the 2015-2016 state budget by a vote of 20 ministers in favor and one abstention — Defense Minister Moshe Yaalon.

The 2015 budget totals NIS 329.5 billion, and the 2016 budget was projected for 343.3 billion, meaning that the budget will have grown 7.2% in real terms between 2014 and 2016, if the estimates hold. The deficit target for 2015 and 2016 is 2.9% of GDP.

The outcome left Prime Minister Binyamin Netanyahu’s coalition intact after his warning that failure to pass the budget would mean its demise. But if the coalition was left standing, so were the demands of several ministers who were holding out for more money than the Finance Ministry wanted to give.

During the long night of wrangling, the Ministry of Health was assured an extra NIS 4.6 billion which will cover mental health reform, support examinations in hospitals, construction of the hospital in Ashdod, shortening waiting lists, home hospitalization by health funds, and upgrading emergency rooms.

The Education Ministry will receive an additional NIS 4.9 billion: NIS 530 million for additional assistants in kindergartens and NIS 170 million for reducing class size.

The Ministry of Public Security won NIS 200 million to strengthen personal security in the Arab sector and NIS 100 million for community police. The fire service will receive an extra NIS 60 million, with an extra NIS 40 million for the police in eastern Yerushalayim.

The Ministry of Welfare will receive NIS 1.3 billion, including NIS 580 million for a major raise in benefits for senior citizens living below the poverty line and NIS 160 million to combat domestic violence and to aid families at risk. NIS 120 million will be allocated to upgrade treatment for populations on welfare, NIS 87 million to develop community services, NIS 36 million for treating people with autism, and NIS 30 million for developing services for the elderly.

Economy Minister Aryeh Deri worked out an agreement with Finance Minister Moshe Kahlon  to designate a panel to examine the implementation of Deri’s proposal for 0% VAT tax on basic food items, which was a sticking point in negotiations for his support for the budget.

Prime Minister Netanyahu concluded, “As I promised, we passed the budget early in the morning without opposition. This shows the cohesion of the coalition and the cohesion of the cabinet. This budget is balanced, responsible, and concerned about growth and takes steps to lower the cost of living. It is a good budget for the state of Israel.”

Due to the late hour, most ministers weren’t actually present for the final vote, but had gone home after leaving word of their decision to vote in favor of the budget.

Next, the budget plan will go to the Knesset for debate and voting.

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