BICOM

Israel’s Cabinet will today vote on the proposed 2015-16 state budget, which it is expected to approve following much political wrangling.

The government must approve the state budget before presenting it to the Knesset. Failure for the Knesset to approve the budget would be considered a vote of no confidence in the government. Although the Knesset began its summer recess last week, it is expected to reconvene during the break to discuss and vote on the budget at the end of the month.

Finance Minister Moshe Kahlon has recently outlined some of the budgetary measures he wishes to introduce. They include an across the board 3 per cent cut in spending across ministries, which has caused consternation among several government colleagues. Education Minister and Jewish Home leader Naftali Bennett described education cuts as “devastating,” while Interior Minister Gilad Erdan, a senior Likud figure insisted that the police must receive increased funds. Both indicated that they may vote against the budget as a result.

Similarly, Shas leader Aryeh Deri insisted that the budget must uphold an agreement he reached with Prime Minister Benjamin Netanyahu to eliminate VAT on basic goods. However, it is reported this morning that Deri and Kahlon have agreed to a compromise which would see zero VAT on transportation and a similar arrangement on electricity and food for the country’s poorest 40 per cent.

The agreement appears to have paved the way for cabinet approval. Netanyahu warned senior ministers yesterday that, “The State of Israel will have a budget because otherwise it will not have a government and our economic and security situation would deteriorate.” However, even if the budget passes cabinet smoothly, it will likely face a far sterner test in Knesset.

In addition to the budget, Kahlon is proposing an accompanying bill which would implement a series of reforms in housing, food and banks aimed at lowering Israel’s high cost of living.