Cabinet refuses to follow Bar-On budget

Finance Minister Roni Bar-On and the treasury planned that the discussion at yesterday morning's cabinet meeting would be about whether to cut the defense budget or the social-welfare budgets. However, the cabinet did not dance to the treasury's tune, and the discussion quickly turned into one that focused on enlarging the 2009 budget spending framework.

In his attempt to make the ministers take responsibility for the painful cuts to their own ministries, Bar-On failed to take into account the possibility that two of his coalition partners raised: loosening the spending reins. The Labor Party and Shas both ignored his proposals and came up with their own: enlarging the increase in government spending planned for next year by 2.5%, instead of the treasury's proposed 1.7% rise. The Pensioners also joined in.

The 2009 budget debate is being conducted under the political cloud of the Kadima primary and the uncertain future of the present government. This has made approval of the budget even more difficult than usual.

Bar-On warned not to let politics influence the country's economy. "In the last few months we have worked hard to isolate the Israeli economy from the political game. Do not break this rule and do not turn Israel's economic policies into an instrument for factional taunting."

Prime Minister Ehud Olmert actually called on Kadima ministers in to oppose the 2009 budget. Labor also opposed the proposed budget, arguing that the suggested cuts would harm the weaker sectors of society.

Transportation Minister Shaul Mofaz also opposed the proposed budget, and wants all discussions related to it to be postponed until after Kadima's primary, scheduled for mid-September. Mofaz believes the winner will be given an opportunity to form a government and to exert influence over determining the budget's framework. The request for a delay stems from a desire to leave the budget open for discussion so as to allow greater flexibility in talks with prospective coalition partners.

Foreign Minister Tzipi Livni is eager to see the government approve the budget before the primary, which would in essence limit the "extortion ability" of parties.