Treasury threatens to rework 2002 budget based on 2% growth

Unless the cabinet voids the law subsidizing large families, paper reports
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Treasury officials may submit an amended budget proposal for 2002 based on 2% growth instead of 4%, Yedioth Ahronoth reports.

Last week the Finance Committee of the Knesset rejected the budget proposal, which had already passed its first round of voting in parliament. The committee said that it was based on an unrealistic growth forecast of 4%.

Treasury officials are appalled that the prime minister is throwing his support behind a bill subsidizing large families with more than four children. This law alone will breach the budget, the officials warn.

Unless the law is voided, the treasury may withdraw the budget bill altogether and replace it with a far tighter one based on 2% growth, said treasury director-general and budget director Ohad Marani.

Amending the budget in that fashion would lead to cuts of up to NIS 3.5 billion, the officials say, in order to meet the government deficit target of 2.4% of GDP.