Israeli budget: 17 pc for defense, VAT down for low income groups

The 2015/2016 biennial state budget totaling NIS 329.5 was approved by the Israeli government in an all-night session ending earlyThursday. Defense Minister Moshe Ya’alon, whose department gets 17 percent of the total, was the only hold-out. The provisions overall put more money in the ordinary Israeli’s pockets by exempting public transport fares from VAT and low income groups from this tax on their bills for water and electricity. Foreign banks will be permitted to operate in Israel to increase competition in that sector. The deficit expands to 2.9 percent for both years, to be offset by a 3 percent across-the-board slash in government spending. More money will be spent on higher education and shrinking classes in primary and secondary schools, on medical care and policing. Pensions will be topped up for the elderly who fall below the poverty line.