Lawmakers Asked to Back Over Billion Shekels Budget Cut, With More to Come

Reductions to fund spending commitments made since 2017 budget was passed

Israeli Finance Minister and Kulanu party leader Moshe Kahlon, March 2017.
Ofer Vaknin

The treasury asked the Knesset Finance Committee on Tuesday to approve 1.12 billion shekels ($320 million) in cuts to the 2017 budget and said more reductions are ahead, as officials scrounge up cash to cover expenses the cabinet and Knesset have approved in recent months.

Amir Levy, the treasury budget director, also asked lawmakers to approve 1.5 billion shekels in extra spending for defense, but said the money was coming out of surpluses accumulated during 2016, including U.S. aid that Israel gets.

But the largest of the cuts will come also come from the Defense Ministry, some 248 million shekels, Levy said. Another 204 million will come from the Transportation Ministry, mainly money allocated for short-term projects, while the 131.7 million in reductions for the Education Ministry will be imposed mainly on ministry headquarters and not on the schools.

Smaller reductions are slated for the health, internal security and welfare ministries, he said.

Mickey Levy, a Yesh Atid MK and former deputy finance minister, said the changes showed that the government’s two-year budget for 2017-18 was “fake.”

“The finance committee is getting requests for scores of changes in the budget and moving reserves from one year to the next, all just a half-year after the state budget was approved,” he said. “A broad reduction in spending across all ministries – which we’re hearing about now – will come at the cost of services provided Israeli citizens and is nothing less than a scandal.”

In fact, nearly a quarter of the extra spending to come out of the budget savings – some 246 million shekels -- will go to extra allowances to Holocaust survivors. Another 230 million will fund an extra week of maternity leave that the government committed itself to. Settling debts left over from the shuttering of the Israel Broadcast Authority accounts for another 150 million.

The settlers, however, get 115 million shekels – 70 million for temporary housing for settlers evacuated from the illegal Amona settlement last February, and another 45 million for armoring buses that travel West Bank roads. Another 29 million is for deals the government made with MKs to win passage of the original budget.

More budget cuts are in store, Levy warned. Finance Minister Moshe Kahlon’s Family Net plan, which increases subsidies for afternoon children’s programs among other things – will probably be funded from 3.5 billion shekels in budget reserves. But that hinges on whether tax revenues are inside forecasts, and the treasury won’t be able to officially determine that until November.

In addition, Health Minister Yaakov Litzman is seeking an extra 1 billion shekels for government nursing insurance, while extra money for teachers will add up to several hundred million shekels more, Levy said.