2005 Budget Deficit to Be Raised to 3.4% of GDP for Performance of Disengagement Plan Only

The amendment will allow the expenditure target to be raised by up to 1 percent and the deficit target by 0.4 percent (bringing the deficit to 3.4 percent of Gross Domestic Product) for the implementation of the disengagement plan and for this purpose onl

18.10.04 / 00:00

A motion to this effect will be presented to the Ministerial Committee on Legislation for approval

The Budget Director, Kobi Haber, announced (10/10/04) that pursuant to a Government resolution that authorized the Prime Minister and the Minister of Finance to adjust the budget expenditure ceiling and deficit target in order to finance disengagement expenditure in 2005, and in accordance with the conclusions of the Committee of Directors General on Compensation and the approval of its recommendations by the political-security cabinet, the Ministry of Finance will propose an amendment, within the framework of the 2005 State Budget, to the law that limits budget expenditure.

The amendment will allow the expenditure target to be raised by up to 1 percent and the deficit target by 0.4 percent (bringing the deficit to 3.4 percent of Gross Domestic Product) for the implementation of the disengagement plan and for this purpose only. The motion will be presented on Tuesday to the Ministerial Legislation Committee for its approval and will then be attached to the budget bill.

The greatest portion of the projected expenditure on account of the disengagement plan will involve compensation for evacuees (residents and businesses), costs related to the establishment and activation of SELA (the disengagement administration), and the evacuation and deployment of the security system and the police.

The defense agencies presented disengagement-related budget demands that are to be spread over the next few years. The size of the budget outlay, the number of years over which it will be spread, and the method of financing have not yet been finalized. As soon the staff work among government ministries is completed (by the end of November, according to the plan), the sums that are worked out will be added to the budget bill before the budget is approved on its second and third readings.
Importantly, if sums beyond these are needed in 2005, it will be proposed that they be obtained by means of reallocations within the state budget.