Aug.02, 2012 | 7:36 AM–Prime Minister Benjamin Netanyahu secured approval for his tax hikes and spending cuts by agreeing to cancel NIS 242 million in cutbacks that would have targeted ministries controlled by his coalition partners in return for their support.

After Finance Minister Yuval Steinitz agreed to the changes in the economic program passed Monday by the cabinet, the Knesset Finance Committee approved the value-added tax increase now scheduled for September 1.

Netanyahu and Steinitz reached deals with the Likud’s coalition partners Shas and Atzmaut, as well as with Uri Ariel from the opposition National Union party.

Among the changes are cancellation of a NIS 15 million cut in the education budget and smaller cuts in higher education.

Shas agreed to support Steinitz’s plan in return for canceling NIS 41 million in cuts for local authorities and NIS 60 million for troubled municipalities. A number of MKs expect much of this funding to go to towns headed by mayors from Shas. These budgets flow through the Interior Ministry budget, and Interior Minister Eli Yishai is the chairman of Shas.

Gain for public housing

In addition, the Housing and Construction Ministry, headed by Shas’ Ariel Atias, will not have its social services budgets cut, including those for rehabilitating neighborhoods, rent subsidies and public housing. The treasury also agreed to allocate further sums for increasing the inventory of public housing units and developing land to accelerate building projects.

Atias confirmed that Shas had reached agreements with the treasury…Read More>>

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