Report: Most Treasury 'Budget' Decisions Are Actually Political

Document by Macro Center for Political Economics shows people have long stated that the Finance Ministry is the center of power in the government.

A new report finds that the Finance Ministry is using the biannual budget to surreptitiously "run the nation," with two thirds of the ministry's decisions in the most recent budget not economic but matters of political policy.

"The Finance Ministry runs the nation and sets policy on matters unrelated to budgetary decisions," says the new report by the Macro Center for Political Economics.

Finance Minister Yuval Steinitz - Tomer Appelbaum
Tomer Appelbaum

On July 21, 2010, for instance, the government published a document titled "Economic Policy for 2011 and 2012." That contained 97 items, of which only 30 - or 31% - had direct budgetary significance.

The remaining 67 (69% ) were policy decisions on matters including regulation for the communications market, drafting yeshiva students and judiciary changes.

"We believe this document should not be called 'economic policy,' since it sets general policy in a range of social, civilian and political fields," the report says.

This mishmash of economic and other decisions were passed as part of the Economic Arrangements Law, which accompanies the budget.

Referring specifically to decisions to increase competition in the cellular, television and Internet markets, the report notes: "These are important decisions, but they should not have been part of the Economic Arrangements Law, but rather should have been passed through different legislation."

"Budget management needs to be returned to the nation and its representatives," said Dr. Roby Nathanson, head of the economic policy center. "Currently in 2012, when the budget is NIS 366 billion, Knesset members can influence how only 3% to 5% is used, which is a maximum of NIS 18 billion.

"Our data shows that the Finance Ministry indeed runs the nation," he added. "We should consider changing the budgeting method so that every ministry can manage its own budget. We need to give our elected representatives the authority to set priorities in their fields."

People have long stated that the Finance Ministry is the center of power in the government, the document states.

"The ministry commands the budget and thus wields significant influence over decisions and operations at other government ministries. There's no other ministry with representatives in all the other ministries," it states.

Furthermore, the ministry's "budgetary activism" has been increasing over the past few years, it adds.

"The ministry is trying to use its strength to influence economic, social and cultural processes," primarily through the Economic Arrangements Law, it says.