07.30.12, 11:45 –The cabinet on Monday will be asked to approve yet another series of financial measures, which include billions of shekels in tax hikes and budget cuts in order to plug a growing deficit in the State budget.
The impending economic measures will be presented by Finance Minister Yuval Steinitz and will attempt to cover the NIS 12 billion (about $3 billion) “hole” in the 2013 budget, which is expected due to a drop in tax revenues.
While doubling the deficit target will allow the government to increase the 2013 budget by NIS 15 billion (about $3.7 billion), the deficit is still expected to amount to about NIS 5 billion ($1.2 billion).
The government will need to cover the impending deficit by further cutting ministries’ budgets with aim of reducing the government’s spending by NIS 1.29 billion ($319 million).
In 2012, the State reached the legal limit of NIS 7 billion ($1.7 billion), for exceeding government spending, meaning the government will need to approve an additional NIS 5 billion cut in the budget in order to meet the expenditure goals.
In March, the Bank of Israel predicted that the Knesset will most likely have to approve a series of government expenditures in 2012 in order to cover an unprecedented NIS 6.4 billion (approx. $1.7 billion) gap in the budget. According to financial assessments, the deficit is much higher today than what was predicted by the Bank of Israel back in March…Read More>>