PM Netanyahu:  Israel views the passage of Iranian warships through the Suez Canal with utmost gravity and this step underscores that Israel’s security needs will grow and the defense budget must grow accordingly.

 Cabinet communique


Reuters archive photo

(Communicated by the Cabinet Secretariat)

At the weekly Cabinet meeting today (Sunday, 20 February 2011):

1. Prime Minister Benjamin Netanyahu made the following remarks:

"Over the weekend, US President Barack Obama decided to veto a draft UN Security Council decision condemning Israel. Israel deeply appreciates this decision and we remain committed to advancing peace both with our neighbors in the region and with the Palestinians. I believe that the US decision makes it clear that the only way to peace is direct negotiations and not through the actions of international bodies, which are designed to bypass direct negotiations.

The most important thing in any negotiations that we conduct is the security component. The security component is critical to any peace agreement and I think that today, we can see what an unstable region we live in, a region in which Iran tries to exploit the situation that has been created in order to expand its influence by passing warships through the Suez Canal. Israel views this Iranian move with utmost gravity and this step, like other steps and developments, underscores what I have reiterated in recent years – Israel’s security needs will grow and the defense budget must grow accordingly.

In order to meet the foregoing, we must advance, strengthen and stabilize our economy. Last week, the Central Bureau of Statistics published data on growth, sharp growth in the Israeli economy, in the last quarter. Naturally, we welcome this. But we know that in order to complete, or continue, this policy, we must maintain the budgetary framework, maintain responsibility, and not deviate from it. This is one of the foundations of the strength of the Israeli economy. Therefore, today we will do precisely this.

Today, Finance Minister Yuval Steinitz and I, in coordination with other ministers, are submitting a proposal to lower public transportation costs by 10%. This will greatly benefit society. Who uses public transportation? Not the people in the top decile, but rather those people without means and those people who want to, and can, use busses and trains, as well as whole groups of people who want to avoid the traffic jams while entering cities. We want to encourage this.

We also want to maintain air quality and reduce pollution. This will benefit both society and the environment, and is good for the State of Israel. Therefore, today, we will reduce public transportation fares by 10%. How will we pay for this, so as to maintain the budgetary framework? We will pay for it by cutting other budgets, but we will not cut the Education, Social Affairs and Social Services, and Defense Ministries’ budgets. We must uphold our priorities and it finds expression in that we are not cutting these ministries. I think that we are acting responsibly in the diplomatic, security and socio-economic spheres."

2. Pursuant to Article 23 of the 1959 State Service Law and in accordance with the recommendation of Culture and Sports Minister Limor Livnat, the Cabinet approved the appointment of Shimon Alkabetz as Culture and sports Ministry Director-General.

3. The Cabinet discussed Eli Amitai’s tenure as Israel Nature and Parks Authority Director Eli Amitai and noted that he will conclude his duties effective 20 July 2011.

4. The Cabinet decided to increase subsidies for public transportation and specified budgetary sources to implement its decision.

5. In order to keep to the deficit ceiling for 2011-2012, pursuant to the 1992 Deficit Reduction and Budgetary Expenditure Restriction Law, in light of the NIS 0.20 reduction in the excise on gasoline (such that the per-liter price to the consumer was reduced by NIS 0.23), and in order to finance the aforesaid reduction in 2012 as well, the Cabinet decided to postpone by one year the reduction in the tax rates on income-earners in the top two deciles.  Finance Minister Steinitz was also directed to consider either the possibility of postponing the planned reduction in the companies’ tax by one year or some other change in the tax regime that would maintain the budgetary balance in each budget year.