While Shas party leader Economy Minister Aryeh Deri signaled he was going to support the state budget, he is now threatening that he and Minister of Religious Services David Azoulai will not support it. One must realize even if the two do not vote in favor for the budget, Prime Minister Binyamin Netanyahu still has a majority in the cabinet.

Deri met with Finance Minister Moshe Kahlon on Tuesday, 19 Menachem Av, at which time they reached agreement by which the Shas zero VAT plan would be pushed aside. However the treasury is willing to give discounts in water, electricity and public transportation to low income families, a plan that was accepted by the Shas leader.

Shas officials are now explaining that while Deri is willing to accept the discount in utility costs, water and electricity, he is not willing to accept a reduction in public transportation instead of eliminating the 18% value added tax on basic goods, which he promised voters he would deliver or not remain in the coalition.

While Deri remains firm, party colleague Deputy Finance Minister Yitzchak Cohen explains it is quite problematic implementing the zero VAT plan.

Speaking with Galei Tzahal (Army Radio), Cohen explained “Both Deri and Kahlon are looking in the same direction, and this represents a significant accomplishment for Deri” Cohen added Shas wishes to remove the VAT tax from basic goods but he admits implementation is not as easy feat.

UPDATE: Deri and Azoulai did not attend the special cabinet meeting addressing the budget on Wednesday, 20 Menachem Av. Most see this as a political move to pressure Finance Minister Moshe Kahlon, and in all likelihood, Shas will reach an understanding with the treasury in time for the Knesset vote on the state budget.

(YWN – Israel Desk, Jerusalem)