Finance Minister Silvan Shalom’s NIS 13 billion government emergency budget cut and tax reform program known as “Operation Defensive Shield - Economics and Social Policy,” came into effect today. The price of cigarettes increased this morning by a shekel a pack, and diesel fuel went up by 10%, or 25 agorot per liter. Beginning May 1, the Value Added Tax (VAT) on all products and services will be increased from 17% to 18%. Shalom said the measures would be in effect through the end of 2003.
The plan aims to free up money in order for Israel to pay for heavy costs incurred during the current war against PLO terrorism. The plan also calls for cuts in social payments including child allowances, unemployment, and possibly even payments to the elderly. Also under the proposal there would also be a 5% cut in the wages of ministers, Members of Knesset, and other elected officials. In addition, there would be a 4% cut across-the-board in the budgets of the various ministries.
Minister of Public Security Uzi Landau stated yesterday that the proposed ministerial budget cuts would have a disastrous impact on the police force and could possibly place Israeli lives in danger. Landau explained that he has been calling for increased funding to hire an additional 10,000 police officers, and an additional budgetary cut would make adding more officers impossible. The minister said that the force is currently stretched to maximum capacity because of the daily terrorist threats.
The plan aims to free up money in order for Israel to pay for heavy costs incurred during the current war against PLO terrorism. The plan also calls for cuts in social payments including child allowances, unemployment, and possibly even payments to the elderly. Also under the proposal there would also be a 5% cut in the wages of ministers, Members of Knesset, and other elected officials. In addition, there would be a 4% cut across-the-board in the budgets of the various ministries.
Minister of Public Security Uzi Landau stated yesterday that the proposed ministerial budget cuts would have a disastrous impact on the police force and could possibly place Israeli lives in danger. Landau explained that he has been calling for increased funding to hire an additional 10,000 police officers, and an additional budgetary cut would make adding more officers impossible. The minister said that the force is currently stretched to maximum capacity because of the daily terrorist threats.