ISRAEL/FILE: Israel cabinet approves new budget draft with large defence cuts

Record ID: 397779

  • Title: ISRAEL/FILE: Israel cabinet approves new budget draft with large defence cuts
  • Date: 14th May 2013
  • Summary: TEL AVIV, ISRAEL (MAY 14, 2013) (REUTERS) ISRAELI MILITARY AFFAIRS ANALYST FOR ISRAEL'S CHANNEL 10, ALON BEN DAVID BEN DAVID (SOUNDBITE) (English) ISRAELI MILITARY AFFAIRS ANALYST FOR ISRAEL'S CHANNEL 10, ALON BEN- DAVID, SAYING: "Over-all we are talking about 3 billion shekels cut in next year's budget which is quite, which has quite a minimal effect I think on the IDF.
  • Embargoed: 29th May 2013 13:00
  • Keywords:
  • Location: Israel
  • Country: Israel
  • Reuters ID: LVA40DHB2TYZ49VY0Y4DTTZNU0EZ
  • Story Text: Israel cabinet approves a budget that includes large cuts in the defence budget to reduce public deficit.

    Israel's cabinet on Tuesday (May 14) approved the 2013-2014 budget draft that aims to slash defence spending by 3 billion shekels (825 million USD) and raise taxes to rein in a growing budget deficit.
    The 17-month budget approved by the cabinet includes cuts of at least 25 billion shekels (7 billion U.S. dollars) between August 2013 and the end of 2014.
    Defence spending was cut by 3 billion, down from a proposed 4 billion.
    A military affairs analyst for Channel 10 Alon Ben-David said the reductions should not affect operational capabilities.
    "Over-all we are talking about 3 billion shekels cut in next year's budget which is quite, which has quite a minimal effect I think on the IDF. We see some reducements in their training, perhaps in the use of reserve troops but over-all it will have no significant effect on the IDF procurement and future projects, we just delay their payments for future years," Ben-David said.
    Other cuts include child allowances and public sector jobs.
    The draft budget is expected to increase income tax by 1.5 percentage points, value-added tax to 18 percent from 17 percent, and corporate tax to 26 percent from 25 percent.
    Finance Minister Yair Lapid had warned that failure to implement public spending cuts could cause an economic collapse.
    Israel's budget deficit was 4.2 percent of gross domestic product (GDP) last year - more than double its initial target - due to overspending by the previous government and lower-than-expected tax revenues as the economy slowed.
    Total spending in 2013 will be 388 billion shekels, rising to 408 billion in 2014.
    Parliament needs to debate and approve the budget by the end of July for it to come into effect.
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