2004 budget sees tax income growing fasterthan the economy

[bemildred]

I think the 4% deficit target is pretty funny given the actual deficit
of 6% for 2003.


The Finance Ministry delivered its budget proposal
for 2004 to the Knesset on Wednesday. The total
scope of the budget will be NIS 254.7 billion. The
budget is based on NIS 202.1 billion net
expenditure in 2004, up 0.5 percent from 2003, and
a deficit target not exceeding 4 percent of GDP.

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The step up in financing costs is due to the
nation's growing debt burden. In 2004, the
government's debt burden will reach 106.5
percent of GDP, compared with 106 percent in
2003 and 102 percent in 2002.

The 106.5% figure is pretty funny too, they will hit 110% or more unless pigs fly.

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As far as revenues are concerned, the treasury
is banking on NIS 149.4 billion income in 2004,
compared with its revised forecast of NIS 143
billion in 2003. In other words, the treasury
predicts that tax collection will increase by
4.5 percent next year, even though the economy
is only expected to expand by 2.5 percent.

Haaretz

[bemildred]

1. Another budget story today:

In nominal figures, the 2004 budget is NIS 15.2
billion less than the original 2003 budget.
Most government ministries are slated to
tighten their belts next year. The defense
allocation will total NIS 42.2 billion, not
including funding for the Mossad and Shin Bet
security organizations. Some NIS 1.2 billion of
the defense outlay is earmarked for
constructing additional sections of the
separation fence. However, the treasury notes
that the government will need to decide how to
finance the additional billions required to
complete the fence.

According to treasury projections, the state
will collect NIS 149.4 billion in tax revenues
next year, and the budget deficit will total
NIS 20.6 billion (4 percent of GDP). Government
debt as a proportion of gross domestic product
will reach a new high next year of 106.5
percent of GDP (only Japan has a higher
government debt ratio.)

The largest single budget allocation is for debt
repayment: NIS 86.7 billion, or 32.5 percent of
the budget.

Haaretz

For 2003, the original projection was a deficit of 3% of GDP, which
is now expected to be 6%. So are they still being wildly optimistic?
You know the answer.