Yuval Steinitz
Yuval Steinitz Photo by Tomer Appelbaum
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If an election to the Knesset, which must be held by the fall of next year, is scheduled earlier, it could cause major damage to the government's budgeting process.

Kadima's departure from the coalition has spurred increasing talk of an early election. If the country goes to the polls early, and a 2013 budget is not passed by the end of this year, the current budget will remain in force. The government is expected under such circumstances to be forced to cut at least NIS 25 billion in state spending, a situation that would be unprecedented.

As of January 1, 2013, the accountant general in the Finance Ministry would then apportion to each ministry on a monthly basis one-twelfth of its 2012 allocation. There have been other instances in which elections have been held early in the year, but the implications for the coming year if the Knesset fails to pass a 2013 budget would be more dramatic than in the past, because additional spending planned for next year cannot be carried out absent a budget.

The government has committed to a variety of outlays that would still have to take place, including for example a wage agreement with the country's public physicians and free day care from age 3. Government spending next year was expected to be NIS 25 billion to NIS 28 billion higher in real terms. The government would therefore have to make up the difference through massive cuts in other areas.