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The 2% across-the-board budget cut announced Thursday will probably hit the defense and education ministries as well despite their preferential status in the 2011-2012 budget.

The government is cutting spending to be able to reduce the tax on gasoline and water, and to subsidize public transportation. Prime Minister Benjamin Netanyahu announced the move following public protests over prices; the cuts would save the government NIS 1.1 billion to fund those three changes.

This will not fund the decision to increase the minimum wage from NIS 3,850 a month to NIS 4,300, also announced Thursday. That move would cost the government an estimated NIS 1.5 billion.

The details of a new minimum wage have not been settled with the Histadrut labor federation.

This is the second across-the-board cut to the national budget, which was approved all of six weeks ago. The first one, of 1.5%, was used to free NIS 800 million to upgrade the country's fire department after the Carmel forest fire.