Israeli Government Panel May Vote Today to Slash Treasury's Powers

Extensive budget management reform leads a deep friction between top ministry officials and the Prime Minister's Office.

The Finance Ministry stands to lose its dominant position in the government under a new, far-reaching reform being initiated by the Prime Minister's Office, one that would distribute budgeting authority among other ministries.

The move, which promises to be the most extensive budget management reform undergone by the treasury since the economic stabilization plan of 1985, has led to deep friction between top ministry officials and the PMO.

The proposal, formulated by the PMO's Governance Committee led by Ehud Praver, head of its Department for Policy Planning, is expected to go before an interministerial panel for discussion today.

The panel includes Eugene Kandel, head of the PMO's National Economic Council and Harel Locker, director general of the PMO, among others, with the treasury outnumbered on the panel by eight to three, a majority vote could lead to Finance Ministry being stripped of much of its power in the budgeting process.

The treasury had been included in the committee's deliberations and, as far as is known, stands in agreement with the general underlying principles of the recommendations - but not all the details.

The ministry claims the committee meetings went smoothly, with agreement between the sides, and that it's necessary to continue along the path of mutual agreement.

That is why the treasury is furious over the PMO's decision to put the draft proposal to a vote before all the details are worked out.

According to treasury officials, 75% of the report is already agreed on. But the decision to bring the recommendations to a vote already this week has created an explosive atmosphere.

Praver is expected to ask for a vote today, despite failing to win the treasury's final agreement on the recommendations, to force the ministry's hand on the points remaining in dispute. Both sides continue to maintain that the process will ultimately conclude in complete agreement and that they're striving to achieve this.

Dealings with the Justice Ministry, considered particularly sensitive, were apparently dropped due to friction that arose. Therefore, the report deals only with the Finance Ministry and its control over all details of the national budget and those of the government ministries.

It's no secret that this dominance is deeply resented by many of the other ministries, which claim that the treasury has effectively taken away their powers and prerogative by controlling their budgets. The committee tried taking a more balanced approach, defining relations between the treasury and other ministries as "conflict management."

Worry over exceeding the budget limit has brought the balance of power to the side of the treasury since the 1985 economic crisis. Today it holds nearly all budgetary authority.

Among the ways in which the Governance Committee would strengthen the treasury is the enhancement of its authority over the budgetary framework and long-term budgetary commitments. Another is to require support of at least 61 Knesset lawmakers for private member's bills that will cost the government more than NIS 50 million annually to implement.

But the individual ministries would get more power over adjustments to their budget over the course of the year because expected changes would be built into their basic spending package.

The Finance Ministry would also lose control of specific items in each ministry's budget, allowing each ministry to move spending from one item to another on its own authority. Each ministry will get a deputy director-general responsible for planning his or her ministry's annual budget, a power now held by the treasury.

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