Daily Israel Report

2006 Budget Passed, Bread Prices Raised

The budget has passed its first reading in the Knesset despite the furor over a hike in the price of bread, a major staple for Israelis living at and under the poverty line.
By Hana Levi Julian
First Publish: 5/10/2006, 12:48 PM / Last Update: 5/10/2006, 3:27 PM


The Kadima and Shas factions voted as a bloc in favor of the budget, as did the Pensioners party, despite threats to leave the coalition rather than support it.

Three Labor members had declared earlier in the week that they would oppose the budget on the issue of raising the price of bread.

Prior to the session, Prime Minister Ehud Olmert warned party chairmen of the coalition factions to exert “party discipline” to ensure their members voted in favor of the budget.

Labor leaders pressured the party's defiant MKs to vote in favor, with Ephraim Sneh and Ofir Paz-Pines telling them that the coalition agreement they signed had required the party’s support of the budget.

In the end, four Labor members voted against the budget anyway: Agriculture Minister Shalom Simhon, Shelly Yachimovitch, Yoram Marciano and Ami Ayalon.

Shas party Chairman Eli Yishai faced questions about his support in light of the fact that his party had based its campaign on support for the poor and opposition to cuts in social programs.

Yishai claimed the budget, including the price hike, was designed by former Finance Minister and Likud party Chairman Binyamin Netanyahu, and therefore did not run counter to his promise to prevent any new hikes.

“I don’t plan, as a member of the government, to defend the decision to raise the cost of bread for the simple reason that I agree with the criticism," he said. "I certainly didn’t enjoy the fact that the increase in the cost of bread took place, but it was before I entered my role and I said that I would not make an additional increase in the cost of bread.”

Netanyahu actually voted against the budget, claiming it did not represent his plan as he had written it and did not reflect what he would have done. “You could have changed it for the better,” he accused, “you changed it for the worse. That’s why we are voting against the budget,” he said.

The budget now goes to the Knesset Finance Committee, after which it returns to the Knesset for two more readings it must pass before being finalized.