Udi Nissan, Yuval Steinitz
Udi Nissan, left, and Finance Minister Yuval Steinitz. Photo by David Bachar
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The head of the Finance Ministry's budgets division, Dr. Udi Nissan, announced yesterday that he is resigning after only two years in the post.

Nissan, whose resignation was a surprise, said he would be leaving in two months.

Nearly all top Finance Ministry officials have left and been replaced over the past two years. (See box. )

Nissan said he faced two choices: to leave now or to stay through the 2013 budget process. If he were to stick around for the next budget - for 2013, since the current budget is for both 2011 and 2012 - that would mean staying for another year and a half. He said he had decided not to wait, since his successor would need enough time to learn the budgets division's work before he or she were to get bogged down in the government budget process.

Nissan took the post on very short notice after his predecessor, Ram Belnikov, resigned. Belnikov left after Prime Minister Benjamin Netanyahu took away his authority to negotiate the new budget, reaching a deal on his own with the Histadrut labor federation and the employers organizations.

Belnikov's unprecedented resignation, which followed Netanyahu's unprecedented steps, left the department's morale low, and Nissan spent a large share of his time rebuilding it as well as its relations with the Prime Minister's Bureau.

Tax imbalances

Nissan said he was most proud of how he had shifted funds from defense to education. The defense budget barely increased, the Israel Defense Forces' retirement age was increased, and higher education reforms received funding, he said.

Nissan was on good terms with Finance Minister Yuval Steinitz. Nissan denied he was leaving so early because he had not been able to convince Steinitz and Netanyahu to support programs he considered important, in particular Netanyahu's plan to lower income and corporate tax rates. Nonetheless, Nissan admitted that the unbalanced Israeli tax system was his main failure: Israelis pay relatively high indirect taxes and low direct taxes. Indirect taxes include value-added tax and fuel taxes, while direct taxes include income tax.

He said there are several other important programs that still have to be seen through, such as the project to aid poorer population groups and encourage them to work, and another one to boost the economy in outlying parts of the country.

"We have developed many plans for aiding the periphery, mostly in health and education, but if I were to stay in my post I would take at least 10 more steps," he said.

Nissan joined the treasury in October 2007 as the head of the Government Companies Authority. At the time, he said he was coming to the treasury for only three years, but he changed his mind in July 2009, when Steinitz appointed him budgets chief.

In September, Nissan will be taking up an economic research position at Harvard University. He has a doctorate in economics from the Hebrew University and did postdoctoral work at Harvard.

He said he wants to research the Israeli economy or public policy, and is considering returning to academia afterward.

Steinitz thanked Nissan for his contributions to the ministry, saying Nissan and his division had played a significant role in how the country handled the the global financial crisis and in shaping the state budget.