The government's proposed 2006 budget is based on forecast economic growth of 3.9 percent even though the Bank of Israel predicts growth this year will be just 3.5 percent.
Finance Minister Binyamin Netanyahu's new budget forecasts that unemployment will drop from of 9.1 percent this year to 8.7 percent in 2006.
Netanyahu also limited growth in government spending to one percent and cut huge amounts totaling more than one billion shekels ($222 million) from the defense budget, despite bulging expenses to cover the expulsion that is planned to start this month.
The budget includes extra money for Prime Minister Ariel Sharon's priorities of combating violence, promoting immigration to Israel and developing the Galilee and Negev.
FM Netanyahu also added money for more roads, so Israelis can "drive without traffic jams," but he made no mention of aid for mass transit. Additional expenditures for new classrooms in the countries schools were also included in the budget.
Netanyahu's fiscal program represents a continuation of his effort to cut welfare spending on the unemployed. He cut benefits to unemployed under the age of 25 in order to encourage them to join the work force, assuming that jobs will be available. He particularly identified newly discharged soldiers, many of whom he suspects are receiving welfare while receiving wages "under the table."
The stock market reacted favorably to the budget and to expectations that the expulsion plan will be implemented without incident. Indices rose to record highs and are up to 150 percent higher than nearly three years ago.
The Finance Minister also said he wants to open competition in the airline industry in order to cut prices on air fares.
The Bank of Israel continued to praise Netanyahu's economic policies but said that there is a slowdown in investment and economic growth. It also warned that the economy would be further damaged if oil prices continue to rise.
The bank did not mention the possibility that it would raise interest rates, signaling continued lower than expected inflation.
Finance Minister Binyamin Netanyahu's new budget forecasts that unemployment will drop from of 9.1 percent this year to 8.7 percent in 2006.
Netanyahu also limited growth in government spending to one percent and cut huge amounts totaling more than one billion shekels ($222 million) from the defense budget, despite bulging expenses to cover the expulsion that is planned to start this month.
The budget includes extra money for Prime Minister Ariel Sharon's priorities of combating violence, promoting immigration to Israel and developing the Galilee and Negev.
FM Netanyahu also added money for more roads, so Israelis can "drive without traffic jams," but he made no mention of aid for mass transit. Additional expenditures for new classrooms in the countries schools were also included in the budget.
Netanyahu's fiscal program represents a continuation of his effort to cut welfare spending on the unemployed. He cut benefits to unemployed under the age of 25 in order to encourage them to join the work force, assuming that jobs will be available. He particularly identified newly discharged soldiers, many of whom he suspects are receiving welfare while receiving wages "under the table."
The stock market reacted favorably to the budget and to expectations that the expulsion plan will be implemented without incident. Indices rose to record highs and are up to 150 percent higher than nearly three years ago.
The Finance Minister also said he wants to open competition in the airline industry in order to cut prices on air fares.
The Bank of Israel continued to praise Netanyahu's economic policies but said that there is a slowdown in investment and economic growth. It also warned that the economy would be further damaged if oil prices continue to rise.
The bank did not mention the possibility that it would raise interest rates, signaling continued lower than expected inflation.