Israel's High Court Serves Notice: No More Two-year Budgets

But justices refrain from disallowing 2017-18 spending package now in force

FILE PHOTO: Israel's High Court of Justice.
Gil Yohanan

The Israeli government’s 2017-18 budget can remain in force, but the High Court of Justice warned in a ruling on Wednesday that it would likely disallow two-year budgets in the future.

The decision, which came in a 78-page opinion issued by an expanded seven-judge panel, came in response to a petition from the Ramat Gan Academic Center of Law and Business, which argued that the government has abused it power to temporarily amend laws via emergency regulations.

The justices ruled unanimously that the current amendment to the Basic Law, the temporary provision of the biannual budget, should not be repealed, but issued a nullification notice – in effect a warning – that it would not countenance amending the Basic Law again via an emergency for budget that extends beyond a single year.

Since Prime Minister Benjamin Netanyahu formed his first government in 2009, it has used two-year budgets more often than one-years that had been the norm, sometimes because elections interrupted the normal budget-making process and more recently because Netanyahu preferred to avoid the political risk to his coalition from a budget debate.

However, treasury officials voiced concerns that a two-year budget risked forcing the government into a spending plan that couldn’t be adjusted for a relatively long time in the face of changes to the economy.

To address that problem, the Knesset voted in August 2016 an amendment in the form of an emergency regulation that amended the Basic Law: State Budget that included a mechanism for adjusting the budget as it moved into 2018. If lawmakers failed by March 2018 to approve the changes, the government would automatically fall.

In its petition the Ramat Gan center said the Knesset abused its authority in approving the amendment. Then-Supreme Court Justice Elyakim Rubinstein, who wrote the opinion, agreed, saying the Knesset had undermined its responsibility to supervise government activities and the authority of the Basic Law by repeated amending it.