(Communicated by the Prime Minister’s Media Adviser)

The Cabinet, early this morning (Monday), 16 August 2004, approved the draft 2005 State budget by a 17-3 vote; ministers Olmert, Katz and Poraz voted against.

Following the vote, Prime Minister Ariel Sharon thanked Finance Minister Benjamin Netanyahu and Finance Ministry officials for their hard work in recent months. Prime Minister Sharon also commended the work of Prime Minister’s Office Director-General Ilan Cohen and Cabinet Secretary Yisrael Maimon.

Prime Minister Sharon said that this was a difficult but necessary budget: “Regarding the security budget, we reached an arrangement acceptable to all sides, which has not been the case over the past two years.  Now, we must stand together in the Knesset vote, this is the responsibility of all of us; even those who are less satisfied need to understand that it was impossible to give more.”

At the at the start of the weekly Cabinet meeting on Sunday morning, 15 August 2004, Prime Minister Sharon said:

“Today, the Cabinet will approve the 2005 budget framework.  As I have in previous years, I intend to fully back the Finance Minister in order to prevent breaking the budgetary framework.

Like every year, it is clear this time as well that the composition of the budget – but not its scope – is open to changes.  Like I have already said, I intend to see to it that the weaker populations – certainly not the elderly and the sick – are not harmed unnecessarily.  The weaker populations have already paid a heavy price in previous years.

The Dovrat Committee education reforms, which have been adopted both by the Cabinet, and myself will be implemented without delay.  From my point of view, this reform in education is this government’s most important economic investment.

This budget responds to the disengagement plan both to the disengagement plan, which has been approved by the Cabinet, and to the accelerated construction of the security fence.

These are major investments and therefore, it is clear that we won’t succeed in doing everything we wanted to do this year. I hope and believe that this discussion will be substantive, thorough and serious, and I call on all ministers to see to it that it is.”