First Part of Economic Arrangements Law Approved

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Finance Minister Yair Lapid.Credit: Ofer Vaknin

The socioeconomic cabinet unanimously approved on Thursday the first third of the Economic Arrangements Law for 2015, the companion legislation for implementing the 2015 state budget. The sections approved include the Finance Ministry’s proposals for lowering the cost of living by making the price supervision system more efficient and giving it more teeth; as well as the proposal to encourage investments in new companies, known as the Angel’s Law.

The Finance Ministry uses the Economic Arrangements Law to push through various reforms and structural changes it wants to make as part of the budget process, without having to go through the regular legislative process. The treasury has changed the process of approving the law in the wake of harsh criticism over use of the law to push through major budgetary changes without serious debate, circumventing the normal Knesset legislative process.

Finance Minister Yair Lapid instructed the treasury to limit the scope of the 2015 Economic Arrangements Law. The ministry will also propose various structural reforms for 2015 to be implemented through regular legislation, said Finance Ministry director general Yael Andorn.

The 10-member socioeconomic cabinet — established a year ago — met for the first time on Thursday, to discuss the Economic Arrangements Law. Treasury officials presented their strategic plan for next year, which includes encouraging people to join the workforce, raising real wages, making investment capital more accessible and continuing to address the issue of excessive executive pay and debt arrangements. Plans for the public sector include making it more efficient, expanding the tax base, and finding solutions for government-owned companies, in particular, the ports.

The goals of the 2015 are economic growth based on innovation and valuing the working man, said Andorn.

The socioeconomic cabinet will meet two more times to go over the remainder of the Economic Arrangements Law. Next Thursday’s meeting will focus on lowering the cost of living, while the following week will address housing and urban renewal.

The socioeconomic cabinet replaced a similar ministerial committee but with expanded responsibilities. It is supposed to meet at least three times a year and discuss strategic plans in the areas of the economy and society. The cabinet is chaired by Prime Minister Benjamin Netanyahu and includes Finance Minister Yair Lapid, who serves as his deputy, as well as Economy Minister Naftali Bennett, Education Minister Shay Piron, and Social Affairs Minister Meir Cohen.

This is the first time the Economic Arrangements Law is being approved under the new process. In previous years the law was discussed in two or three full cabinet meetings dedicated to the budget debate. The new model of approval is intended to allow a full, exhaustive debate of all the issues involved with the participation of all the ministries involved.

The decision of the socioeconomic cabinet on the matter is the equivalent of a full cabinet decision - unless a minister decides to appeal the decision, in which case the law will have to be brought before the full cabinet for a vote. After approval, the bill will go — along with the Budget Law for 2015 — to the Knesset for approval.

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