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The cabinet will hand in its original 2009 budget proposal next week, as approved two months ago by Prime Minister Ehud Olmert's government - even though fundamental sections no longer apply.

Given the shape of the new government currently being forged, the proposal is expected to undergo sweeping changes, costing some NIS 2 billion. And the budget was also prepared before the global economic crisis erupted in its full-blown form.

The upshot is that sources in the Knesset and Finance Ministry now believe the government will be unable to meet the deficit and tax revenue targets presented in the original budget, which had been compiled under Finance Minister Roni Bar-On.

The Finance Ministry said the budget proposal is to be submitted to the Knesset by the end of next week in accordance with the Budget Law, which requires that it be done by October 31. But, in light of the coalition talks and resulting budget changes, it remains unclear when the first reading of the proposal will be held.

Should the vote be in mid or late November, after the new government is formed, the Knesset will have only four to six weeks to debate the budget and the weighty Economic Arrangements Law if it intends to approve it by the end of December.