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Israel`s Government Budget plan for 2001 approx. 60 billion US$

08/02/2012

Israel`s Government Budget plan for 2001 approx. 60 billion US$

In the coming year the total budget planned by the government of Israel reaches 60 billion US dollars. This was published recently by the Israeli Ministry of Finance and is the largest budget in Israels history. The total governmental expense is estimated to reach some 50 billion $ (not including payment of debts). The gross budget is estimated to be 43% of the GDP.  The unemployment is estimated to be around 8-9%,. All of the above is based upon the estimate that the overall growth will be between 2.5 and 3.5 %.

The net budget for the year 2001 is 50 billion US$. That means that the government holds a debt of 20 billion US$.

The countries income is based upon 40 billion US$ from income tax., privatisation of National companies (such as “Bezek” – Israels national tele-communication company) and national holdings in banks (such as “Leumi” bank)  all which reach a total of approx. 1 billion US$ and selling Government Bonds (0.8 billion US$).

Further planes are expected to be in the form of BOT projects initiated by the government to increase development of energy and communication infrastructures. For example a BOT project for a 50 Million kubic meters desalination water plant is in advanced stages. Such a project is expected to create partnerships between local and international companies thus both increasing the investments in Israel and promoting the development of local knowledge and skills.

The proposed budget for the various ministries is as follow:

Ministry Budget in billion US$ Ministry Budget in billion US$
Prime Minister 0.54 President 0.025
Finance 1.3 Interior 0.35
Internal security 5.6 Justice&Religion 1.8
Industry & Commerce 0.16 Science, Culture $ Sport 0.72
Foreign Affairs 1.1 Communication 0.06
Environment 0.22 Defense 37
Education 23.3 Health 12.7
Tourism 0.53 Transport 0.37
Construction 0.27 Emigration 2
Employment & Welfare 4 National Infrastructures 0.2
Agriculture 1.1    

The proposed budget enables an interesting glance at the way the Israeli government is constructed, the allocation of money which are unlike common western countries and democracies. The security budget reaches almost 20% of the total budget. Education is only 10% of the budget. The total welfare budget reaches almost 20 billion US$ (almost a third of the total budget) out of which  7 billion US$ is allocated to education (including universities and research institutes) and 3 billion US$ allocated to health.

Some Ministries have been allocated suprisingly small budgets. For example: the Ministry of National Infrastructures, which is in charge of the energy sector and management of water resources has a budget which is less than 0.1% of the countries gross budget. In a similar manner the ministry of the Environment has a budget just a little greater than the budget allocated to the  ministry of national infrastructures.

Nevertheless this proposed budget is slightly deceiving as it doesn’t include in some of the ministries budgets projects which are in their field of work. For example some 0.7 billion US$ are planned to be allocated to transport infrastructures around the country (in comparison with the total budget of the ministry of transport – 0.4 billion or the ministry of national infrastructures – 0.2 billion).

The proposed budget differs from the previous year by an overall increase of 6.7% in comparison with the year 2000. Further changes are an increase of 250 MUS$ in the budget of education and culture, some 180 MUS$ in transportation infrastructure and only 25 MUS$ in management of water resources.

The state of Israel along with other countries in the region suffer from a drought for a third consecutive year. Water resources are depleting in an alarming pace and projects of increasing the availability of fresh water are not meeting the demand.

This proposed budget may change as the events in the past few months have caused the government to re-evaluate the budget. Due to the ongoing fighting there is a demand by the defense authorities to enlarge their budget by almost a billion US$.

 Further changes may occur as the budget will be brought to the parliament to be approved, and at the present fragile political conditions it is not likely at all that the budget will get through the parliament at its present structure.

One Comment
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