Government Inability to Advance State Budget Violates Basic Laws, High Court Says

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At an anti-Netanyahu demonstration near the prime minister's official residence, protesters raise an enlarged 200 shekel bill, on which the words '2020 state budget' appear, Jerusalem, August 8, 2020.
At an anti-Netanyahu demonstration near the prime minister's official residence, protesters raise an enlarged 200 shekel bill, on which the words '2020 state budget' appear, Jerusalem, August 8, 2020.Credit: Tomer Appelbaum

Israel’s government is violating one of the country’s basic laws by not advancing the 2020 budget for Knesset approval by December 23, High Court of Justice President Esther Hayut said in a hearing on petitions against delaying the budget.

Following the hearing, the High Court issued a conditional order to the government, mandating that it must explain why the amendment postponing the deadline for passing the budget into December should not be canceled. That 100-day extension was passed in August as a compromise after Likud refused to pass the budget.

Should the amendment be annulled, the Knesset would be disbanded and Israel would head to a new election.

At the moment the High Court has issued only a conditional order, but it indicates that the court is inclined to side with the petitioners and has given the state until December 15 – one week before the final budget deadline – to respond.

The justices who heard the petitions were Hayut, Neal Hendel and Uzi Vogelman. The petitioners were former lawmakers Stav Shaffir and Yael Cohen Faran, the nongovernmental groups New Contract and National Responsibility and the Movement for Quality Government.

The petitioners argued that the emergency order to delay the budget was unconstitutional and violated a basic law, undermined the need for an annual budget, and shifted responsibility for setting budgeting priorities to the government while keeping the Knesset from overseeing the process and received the approval of less than the 80 Knesset members necessary for passing a two-year budget.

Hagai Kalai, representing the MKs and New Contract, stated that in a 2017 ruling, the High Court blocked the two-year budget from being passed as an emergency order, stating there was a need to balance the essence of the emergency order and the harm to the principles of government. “Regarding the two-year budget, Judge Hendel and the other justices addressed the fact that the emergency orders designed for the needs of a particular coalition created a particularly complicated challenge,” he said. “The emergency order we’re discussing today is much more tailored to a coalition than the two-year budget in 2017. There’s no essence that can justify it.”

Kalai rejected the oft-repeated defense that the budget was not passed due to the coronavirus crisis: “A budget bill is ready, it can be passed now. The coronavirus is kind of a magic word lately – but it’s not accurate here. A list of principles of government are being harmed here.”

High Court of Justice President Esther Hayut.Credit: Oren Ben Hakun

The Knesset’s representative, Avital Sompolinsky, argued that given the circumstances, this was not a violation of basic laws and the delays were justified. She noted that the Knesset Finance Committee had approved a 11 billion shekel addition to the temporary budget, which is calculated based on the last approved budget. “There’s no question that the way the Knesset approved the amendment was unusual,” she stated. The amendment to delay the budget approval deadline by 100 days came at a time when there had already been a seven-month delay in approving the 2020 budget, and then came the political crisis and the coronavirus, she stated.

Hendel stated in response, “As a result of the amendment, there was no budget for a full year. This is one of the most important things the Knesset does, and it’s not clear what the justification for this is.” Hayut added, “And then outside the budget framework, they hand out 11 billion shekels.”

She addressed the fact that the Knesset has not even been given a budget draft bill, which means that it will not have time to discuss a proposed budget before the extended deadline of December 23. Sompolinsky stated that a bill would be presented in the future and the Knesset would be able to vote on it.

Hayut responded, “When a government violates such as clear order, has the Knesset done enough to make the government face this? Or are you waiting until December 23?”

Danielle Marx, representing the government, questioned whether the court had the authority to intervene in the Knesset’s decision in a way that would bring about a new election, given that the Knesset amended a basic law after three previous elections.

Hayut responded, “The government violated a basic law even before the postponed deadline, and you have no explanation for this?” Marx stated that she indeed had no explanation as to why no budget had been presented for approval.

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