Road cutbacks to pay for bus subsidies
Half of NIS 300m for public transport to come from other ministries.
Prime Minister Benjamin Netanyahu was in a hurry last week to announce steps to calm the protests against recent price hikes for many goods, particularly gasoline. But it now turns out that one of Netanyahu’s main proposals, lowering the price of public transportation, will be paid for in ways that will not please bus-riders: The money will come from developing and maintaining roads − as well as cuts in other ministry budgets.
On Sunday, the cabinet will be asked to approve a proposal from Finance Minister Yuval Steinitz to increase the subsidy for public transportation by NIS 300 million in 2011 and 2012.
Half the sum will come from cutting inter-city road building projects over the next two years.
The other half of the NIS 300 million will come from an across the board cut of 1% in all ministry budgets for the next two years, except for the ministry with the highest budget, the Defense Ministry. The Education Ministry budget will be cut only 0.5%.
The treasury expects the cabinet to pass the proposed cuts, even though Transportation Minister Yisrael Katz (Likud) objects. Katz, along with Interior Minister Eli Yishai (Shas) and Communications Minister Moshe Kahlon (Likud) pushed for reducing fuel taxes in recent weeks, and the treasury says it is now time to find budgetary sources for the various cuts.
The higher subsidies for public transport will go to lowering the price of monthly tickets by 10%, and a 10% drop in bus prices in the periphery as well as improved service for public transport in the big cities.
The price of a monthly train pass will drop from the price of 26 regular journeys to only 23. The treasury says the changes will “encourage the use of public transportation as an alternative to private cars.”
The money to make up the cut in fuel taxes agreed to by Netanyahu will most likely come from canceling changes in the income tax brackets scheduled for this year, and not from cuts in government ministries.