Knesset Revolts Against Treasury on Allowance Cuts

There is no majority in the Knesset Finance Committee to support the treasury's request to continue the 4 percent cut in National Insurance Institute (NII) allowances in 2008.

After MKs discussed the continued cuts yesterday, it became clear that the state's attempt to save NIS 100 million next year will have a hard time passing. The committee also objected to a proposal to increase the amount paid by health fund members for drugs provided as part of the health basket from 5.38 to 6.4 percent of the cost.

In addition, there is still no Knesset majority to continue the freeze on allowances in 2008, a proposal that would save NIS 800 million to NIS 1.3 billion. NII allowances were supposed to be incremented according to the rise in the consumer price index.

There is also little support in the Knesset for an another treasury decree: NII payments for housewives, which was meant to bring in another NIS 450 million a year in revenues. All told, if the three proposals are rejected by the Knesset, there will be NIS 1.85 billion less for the 2008 budget.