Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon are scheduled to meet Thursday morning for a decisive meeting on the budget for both this year and 2016. The meeting is being held in advance of a Knesset budget session set for Sunday.
Due to disagreements over the 2015 budget among the parties in Netanyahu’s prior coalition, the budget for this year was never passed. Elections were held in March, followed by the formation of a new government. In the absence of a 2015 budget, the government is functioning based on last year’s spending plans.
Sources at the Prime Minister’s Office and the Finance Ministry expect that a single budget for this year and next will be presented to the Knesset, as stated in the coalition agreement between Netanyahu’s Likud party and Finance Minister Kahlon’s Kulanu party.
Netanyahu had initially sought a three-year budget, but Kahlon and staff at the Finance Ministry opposed such a budget, as have the heads of other parties in the coalition.
Netanyahu, who is himself a former finance minister, had sought the three-year plan, arguing it would provide for greater stability. Knesset sources have said, however, that a three-year budget would be a bid on Netanyahu’s part to ensure his long-term political survival, since he would then be spared the passage of another budget until 2018.
Although Sunday’s meeting is expected to review economic data for this year and next, it is not clear how large next year’s defense budget will be.
Finance Ministry budget director Amir Levy has been insisting on restrained levels of defense spending, although Netanyahu’s position on the matter is not known.
During and after the election campaign, Kahlon was a vocal advocate of a social welfare-oriented budget. It is expected that the final amount of the budget will be decided at a cabinet meeting on July 23.
Assuming the Knesset approves a measure deferring passage of the budget by parliament, the last day for the passage of the budget by the cabinet, prior to final approval by the Knesset, is August 23.
Legislation is pending that would allow the government to function without a 2015 budget until November.
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