BICOM

Several government ministers yesterday publicly opposed measures proposed by Israel’s Finance Minister Yair Lapid, who is set to present his budgetary plans to Prime Minister Benjamin Netanyahu today.

The state budget must be approved by the Knesset by the end of July, with the deadline for endorsement by the Cabinet June 9. However, there were signs yesterday from several of Lapid’s government colleagues that securing such agreement will likely be a fraught process. Lapid has indicated that he intends to make sharp cuts in an attempt to cut the country’s £7 billion deficit.

Likud party Interior Minister Gideon Sa’ar said yesterday, “Harming the budgets of local authorities is dangerous,” warning that it could lead to “a leadership crisis that costs the state billions.” Transportation Minister Yisrael Katz, also of Likud, similarly predicted that cuts to his ministry’s budget “will cost the treasury billions. It will involve broken promises and a loss of trust by those residents who live in the periphery.” Meanwhile, Minister of Public Security Yitzhak Aharonovitch of the Yisrael Beitenu party vowed to oppose cuts to his ministry’s finances, calling it a matter of “national interest.”

Lapid is yet to announce detailed measures. However, reports indicate that they will include a cut in child allowances that favour families with large numbers of children, and a one per-cent rise in VAT, with fruit and vegetables no longer exempt from the tax. High-earners also look set to see an increase in income tax. The defence budget will reportedly be cut significantly with around £1 billion in savings made from other ministry budgets.