Ministers preemptively pummel Lapid’s budget cuts

Ministers preemptively pummel Lapid’s budget cuts

Slashes loom as new finance minister mulls measures to bring Israel's swelling deficit under control

Finance Minister Yair Lapid (photo credit: Yonatan Sindel/Flash90)
Finance Minister Yair Lapid (photo credit: Yonatan Sindel/Flash90)

Israeli ministers on Wednesday criticized Finance Minister Yair Lapid following indications that he intends to implement sharp cuts to their budgets as part of a plan to rein in Israel’s NIS 39 billion deficit.

Although Lapid has indicated that he would have to apply deep cutbacks to cover the burgeoning deficit, there have been few specific reports as to where the cuts would be made.

“Harming the budgets of local authorities is dangerous. It could send them into a tailspin, and when a local authority breaks down, there’s a leadership crisis that costs the state billions,” said Interior Minister Gideon Sa’ar.

Sa’ar added that many municipalities had recently emerged from a long crisis and were still very fragile.

Transportation Minister Yisrael Katz also voiced his concern over the specter of cut to the transportation ministry, calling it a “scandal.”

At a press conference on Wednesday, Katz said that a reduction in 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.

“After four years, there’s an attempt to exploit the budget crisis to set upon the billions designated for infrastructure works,” he added.

Minister of Public Security Yitzhak Aharonovitch also vowed to oppose any cuts to his ministry’s budget.

At a ceremony on Wednesday, Aharonovitch said he intends to do whatever it takes to prevent cutbacks, calling it a matter of “national interest.”

Negotiations over the 2013-2014 budget are still ongoing, with Lapid and Prime Minister Benjamin Netanyahu due to meet on Thursday to discuss the matter.

On Sunday, Lapid announced that Israel’s policy of passing biannual budgets, adopted by his predecessor Yuval Steinitz, would be canceled in favor of a yearly budget starting in 2015.

The decision has reportedly received Netanyahu’s blessing.

Israel’s budget deficit in 2012 reached NIS 39 billion, or 4.2% of its gross domestic product, more than double the state’s originally projection for the shortfall. Officials have said new taxes and severe cuts in public expenditures would have to be put into place in the 2013 budget in order to bring the deficit under control.

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