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Israeli committee to recommend defence cuts to finance reforms

Israel Materials 26 September 2011 17:45
Israeli committee to recommend defence cuts to finance reforms
Israeli committee to recommend defence cuts to finance reforms

Azerbaijan , Baku, Sept. 26 / Trend A. Isgandarov/

A committee set up by Prime Minister Benjamin Netanyahu was to recommend an 800-million-dollar cut in Israel's defence budget to finance affordable housing and other reforms, in a bid to bring down the cost of living, according to media reports.

The recommendations, which were due to be submitted to the government and presented to the media later on Monday, have already sparked strong objections from the country's military leaders, who have warned that the cuts would harm the army's combat readiness, dpa reported.

The Israel Globes economic daily, citing unnamed sources, said the committee's main suggestions include long-term rental housing, the construction of 165,000 apartments on available land, easing the terms for developers in land tenders, levying fines for unoccupied apartments, and subsidizing "vacate and build" projects to the tune of nearly 10 million dollars.

The panel also calls for free education to be offered from the age of three.

The committee, headed by economist Manuel Trajtenberg, was set up by Netanyahu in response to country-wide protests, which peaked early this month when over 400,000 people attended demonstrations throughout Israel demanding "social justice."

The premier has charged the committee with finding "economically sound" ways to reduce the cost of living without breaching the budget framework.

In addition, capital gains tax would be increased by 5 per cent and government plans to lower corporate tax would be shelved.

And tax levels on salaries of over 11,000 dollars per month would be raised by 3 per cent to 48 per cent, according to the reports published in advance of the committee's findings being made public.

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