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* The goats. "Goats should be kept in the pen, not in the budget," said Limor Livnat. Her remark was directed at Finance Minister Benjamin Netanyahu, in response to the many cutbacks in his new budget. Netanyahu later rescinded some of the cutbacks. Livnat has a point, in the sense that credibility was damaged along with the economy. But this is human nature; politicians, in particular, feel that they have to come out with declarations to the press: "I won, I achieved such-and-such." Only then do they vote on all the other cuts. So there really is no choice but to continue with the system of the goats - as long as we remain a society that finds it so difficult to achieve consensus.

* The sleight of budget. The government's budget for 2005 is in nominal terms, with no inflationary adjustment. In other words, if there is inflation of 2 percent in 2005, then there will in effect be a real cutback in the state's spending plans. And the ministers didn't even notice.

* The failure. Both laws of economics and natural justice dictate that the price of water to farmers be raised significantly more than that of households: farmers pay just NIS 1 per cubic meter, while households pay NIS 2 per cu.m. The extra is just the local authority's cut. The budget division erred professionally when it proposed raising the price of water for both sectors by the same amount - 20 agorot per cu.m. - but the result was even worse. Following failed negotiations with Agriculture Minister Yisrael Katz, it was agreed to raise the cost of water for households by 20 agorot, but for farmers by only 15 agorot. The 97 percent of the population that does not make its living from agriculture heard - but said nothing.

* Wages. Netanyahu agreed to drop legislation on wage reductions, because he was concerned about his public image. But this decision means that he has lost credibility with the Histadrut: how is he going to convince the national labor union to cut NIS 2 billion from the public payroll? Without legislation there would have been no reforms in the pension sector or the ports. Has he forgotten the lesson he just taught us?

* The cutbacks. Despite the keening and wailing of the cabinet ministers, the cutbacks to their ministries were fairly small: in the end public spending was hardly trimmed at all. It will rise in line with the expected population increase of 1.7 percent, because one must take into account the cost of the disengagement. So in fact there's no diet after all, not even a slimming down - despite all Netanyahu's protestations.

* Insulted. Olmert is far angrier at Prime Minister Ariel Sharon than at Netanyahu (for "shooting us in the back"). As soon as he started to have his say, Sharon said "this sounds like the Labor Party holding talks on the coalition." The entire cabinet laughed. Except for Olmert. You could see he was insulted. Him and Labor? There is no greater insult in the Likud party.

* Next step. The Histadrut has declared an industrial dispute, and the treasury is ready to sit with them to reach an agreement - in other words, prepared to give up on some of the cutbacks. Poraz will get an additional few hundred million for the local authorities at the end of the month, so he can start the new academic year. Then the budget comes before the Knesset where each MK will bore into it with full force - until all the budget reserves have been eaten up.