Political Chaos Looms as Israel’s Deadline for Passing Budget Nears

Netanyahu wants a one-year budget and Gantz a two-year one; at stake is who would become caretaker prime minister if their unity government fell

Chaim Levinson
Chaim Levinson
Benny Gantz and Benjamin Netanyahu at a cabinet meeting in Jerusalem, June 2020.
Benny Gantz and Benjamin Netanyahu at a cabinet meeting in Jerusalem, June 2020.Credit: Olivier Fitoussi
Chaim Levinson
Chaim Levinson

With a late-August deadline bearing down for the Knesset to approve a 2020 budget, the approval process has ground to a halt amid political squabbling between Prime Minister Benjamin Netanyahu and his partner in Israel’s unity government, Benny Gantz.

Sources in the Finance Ministry’s budget department told Haaretz that until last Tuesday they were working intensively on the document, but since then the politicians seem to have lost interest.

The crafting of the budget is in its final stages, but Gantz and Netanyahu are preoccupied with awarding grants as part of Israel’s response to its second wave of the coronavirus.

By law, a government that takes office during a year when no budget has been passed must push through its own budget within 100 days, or the government falls. The current government was sworn in on May 17, so the 100 days end in late August.

The main dispute blocking the passing of a 2020 budget is the demand by Gantz, the head of the Kahol Lavan party, to pass a two-year document, as stipulated in his party’s coalition agreement with Netanyahu’s Likud.

Netanyahu, however, is keen to pass a 2020 budget only, after which work could begin on a framework for 2021.

Under this scenario, if a 2021 budget is not approved by March 31, the Knesset will be dissolved and an election will be held in the summer, with Netanyahu remaining as caretaker prime minister. If the government collapses in any other scenario, Gantz would be caretaker prime minister.

The Finance Ministry hopes that somehow the budget will be submitted for cabinet approval on Sunday, less than a month before the deadline. After that there would be marathon deliberations in the Knesset.

It bears noting that in 2018 the High Court of Justice overturned a law on an economic issue – the taxing of owners of three or more homes – for procedural reasons. The bill was submitted to the Knesset in the middle of the night after a debate in which no experts took part.

Two years later, the budget issue is also one that requires detailed discussion.

Netanyahu, at least, has the backing of the Finance Ministry, which favors a one-year budget. Likud officials say that if necessary, their party will try to pass legislation extending the time frame for passing the budget.

However, the longer the budget is delayed, the less logical it becomes to pass a document solely for 2020.

As a professional in the Finance Ministry put it, “What’s happening with the budget is insane, but it’s not the most insane thing going on now.”

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