2015 Budget Set for First Vote in the Knesset

The Economic Arrangements Bill, which supplements the budget, is shorter this year, but it still might be hard to pass the budget by January 1.

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Finance Minister Yair Lapid and treasury officials present the 2015 budget, September 28, 2014.
Finance Minister Yair Lapid and treasury officials present the 2015 budget, September 28, 2014.Credit: Emil Salman

Finance Minister Yair Lapid will present the 2015 state budget to the Knesset on Monday, launching marathon efforts to get the document passed in time to take effect on January 1.

On Monday, MKs are expected to vote on the bill late at night; they will be voting on the first of three readings required to make the budget a law. In the afternoon, Lapid will formally present the document to President Reuven Rivlin.

The proposed budget, which has been approved by the cabinet, is expected to be closely scrutinized before the final votes. Following its expected approval on first reading, the bill goes to the Knesset Finance Committee, which will hold marathon sessions in an effort to get the document passed in time to take effect by January 1.

The chairman of the Knesset Finance Committee, Nissan Slomiansky, has said he’s not sure the panel will be able to approve the budget in the allotted time. In one sense, the committee will have an easier time this year; the 2015 Economic Arrangements Bill, which supplements the budget, is shorter than usual.

One hurdle is that MKs want parts of the Economic Arrangements Bill changed; these include the taxation of foreign athletes in Israel and legislation impeding medical tourism.

In separate legislative business this week, the Finance Committee will convene for its final consideration of Lapid’s bill exempting qualifying first-time buyers of new homes from Israel’s 18% value-added tax. Despite efforts at a committee filibuster by ultra-Orthodox parties, this bill is expected to pass in committee and become law next week.

Finance Committee members recently demanded that Lapid give them an estimate on how much the VAT exemption would cost the government, but he refused. Their demand was prompted by a Lapid statement about a month ago: He pegged this figure at 1.3 billion shekels ($341 million) next year, while the deputy budget chief of Lapid’s ministry, Yael Mevorach, has said revised calculations put the figure at about 2 billion shekels.

On Tuesday, the committee will also consider adjustments to the budget for the current year, including a 20-million-shekel addition for the Housing and Construction Ministry to beef up security in East Jerusalem, the scene of unrest for months. That would bring the ministry’s funding this year for this to 80.7 million.

The Finance Ministry also seeks to transfer 101 million shekels from the National Insurance Institute to the Immigrant Absorption Ministry, in part for expanded funding for immigrant benefits due to the upsurge in immigration.

The Finance Ministry also seeks committee approval for a 35.3-million-shekel increase for the Religious Services Ministry, which would include 17 million in funding for the ministry’s Jewish identity agency, and 7.2 million for marital counseling and in commemoration of the legacy of the country’s chief rabbis.

It would also include 6 million shekels for a number of purposes: the establishment of new religious institutions, dealing with the current shmita year, which occurs every seven years, when according to religious tradition agricultural land lies fallow, and assistance for religious councils. Also, 4.5 million would go to strengthening spiritual ties with Diaspora Jewry.

The Finance Ministry seeks to transfer 86.6 million shekels to the Regional Development Ministry; 25 million shekels of this would fund a student village in Sderot near the Gaza Strip. Five million would go for the development of student villages and other new residential sites in the Negev, and for the expansion of the student village in Yeruham.

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