The Cabinet is convened for a special session to approve the proposed budget for the 2009-10. The meeting has lasted several hours, as of late Tuesday afternoon, and no word of when it might end has been received. Many budget cuts are in the works, though the list has changed several times in recent days.
A group of mayors and local council leaders attempted to burst into the Prime Minister’s office before the meeting, in protest of the planned cuts. The mayors had earlier protested outside the government complex, joined by university students and youth movement members protesting the expected education cuts.
Among the items to be included in the budget is a “temporary” raise in Value Added Tax (VAT), from 15.5% to 16.5%.
Prime Minister Binyamin Netanyahu has apparently accepted the demands of Defense Minister Ehud Barak (Labor). Not only have some major cuts been erased that had been planned for the defense budget, but the budget also is likely to be increased: 1 billion shekels this year ($250 million), and another 1.5 billion at the end of 2010. Netanyahu and Barak met at length during the night; Barak apparently threatened that his party would vote against the budget if his demands were not met.
Other budget items of interest:
* The Shas party ministers threaten to vote against the budget if VAT is imposed on fruits and vegetables, and if the decrees on monthly social allowances are not withdrawn.
* Culture and Sport Minister Limor Livnat, of the ruling Likud party, says she will vote against the budget if a tax is imposed on sports lottery winnings.
* 116 million shekels will be added to the National Authority for Road Safety.
* The Finance Ministry demands that income tax reports be filed online, saying fictitious filings cost the country six billion shekels. The industrialists object, saying that the matter must be carefully investigated before such a major change goes into effect.
* No attempt will be made to put a total end to the employment of foreign workers in construction, industry and restaurants. However, a ceiling of 6,000 such workers will be set.