Israeli cabinet approves 2009-2010 budget

JERUSALEM, May 13 (Xinhua) -- The Israeli cabinet Wednesday voted to pass
the 2009-2010 budget, local daily The Jerusalem Post reported.

Despite opposition from Shas party, a key coalition partner, Israeli
cabinet approved the budget, with 26 cabinet ministers voting for the bill while
the four Shas ministers against it, said the report.

Following the cabinet approval, the budget will now have to be approved by
Israel's Knesset (parliament).

The vote came hours after marathon late-night negotiations produced an
agreement for an across-the-board cut of 5 percent to all government ministry
budgets, and a raising of value-added-tax by 1 percent.

As part of the deal, the defense budget is expected to be cut by 1.5
billion shekels (about 365 million U.S. dollars). Israeli Defense Minister Ehud
Barak, as well as officials in his ministry, had opposed any such cuts.

Meanwhile, local daily Ha'aretz reported that value-added-tax will also be
applied to fruits and vegetables for the first time in Israel's history, which
is expected to add 1.8 billion shekels to the government coffers over the next
two years. (1 U.S. dollar equals 4.1 Israeli shekels)

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