Daily Israel Report

Knesset Approves 2011-2012 Budget, 63-33

MKs pass the 2011-2012 budget with a solid majority; Netanyahu says “fiscally and socially sound” budget will boost economy.
By Maayana Miskin
First Publish: 12/29/2010, 10:49 PM / Last Update: 12/29/2010, 11:00 PM

Flash 90

Prime Minister Binyamin Netanyahu got a vote of confidence Wednesday as the Knesset passed his 2011-2012 budget in a 63 to 33 vote. The total budget for 2011 will be NIS 247 billion, and for 2012, NIS 259 billion.

The prime minister dismissed criticism from opposition parties, who claimed the budget is not socially responsible. “This is a good budget, it is both fiscally and socially sound, and will bring the Israeli economy in the right direction,” he said.

Sources in the Prime Minister's Office pointed to Israel's relatively strong economy in the global economic crisis as proof that Netanyahu's policies to date have been successful.

Finance Minister Yuval Steinitz praised the budget as well. “This is a budget of growth, education... This is a budget that will bring the hareidi and Arab sectors into the national economy. It is good for the state of Israel, the citizens of Israel, and the Israeli economy,” he proclaimed.

Leading opposition party Kadima slammed Netanyahu and his government following the vote. “The Prime Minister of Israel is named Eli Yishai, his second-in-command is Ivet [Avigdor] Lieberman, and his deputy is Yaakov Leitzman," sources within the party said, naming ministers from Shas, Israel is Our Home and United Torah Judaism, respectively. "Netanyahu... hands out money to keep his seat,” the anonymous detractors said. 

Lower Taxes, but VAT Remains
The new budget includes lower income tax and lower taxes on companies, something the Finance Ministry hopes will encourage development and create new jobs.

However, the VAT will remain at 16% after being raised from 15.5% in 2009.