Timetable for Approval of Israeli Budget for 2017-2018 Moved Up

President Rivlin voices criticism of the budget process, saying that provisions in the Economic Arrangements Bill get short shrift.

Benjamin Netanyahu, right, in the Knesset, July 19, 2016.
Olivier Fitoussi

The Knesset sessions leading up to the two final votes necessary for passage of the two-year 2017-2018 budget will begin on December 18. The process will last several days and will include debate and voting on the Economic Arrangements Bill, supplemental legislation that accompanies the budget. Passage would normally have been concluded at the end of the month, but the timing has been moved up as a result of Hanukkah, which begins the evening of December 24.

Due to the change in schedule, the Knesset committees dealing with the Economic Arrangements Bill have been asked to complete their scrutiny of the bill by December 8, leaving them just four and a half weeks to consider legislation that includes 50 separate topics.

On Monday, the Knesset approved the assignments of various provisions from the bill to the Knesset committees that will consider them. At the request of Knesset Finance Committee chairman Moshe Gafni (United Torah Judaism), the provision relating to Finance Minister Moshe Kahlon’s plan to impose a special tax on owners of three or more homes, has been assigned to Gafni’s own committee.

The provision is an attempt to encourage investors to sell residential property and thereby increase supply and drive down prices. Last week, in the face of a request that the provision be removed from the Economic Arrangements Bill and considered separately, Knesset House Committee chairman Yoav Kish (Likud), who is seeking changes to the bill, refused to advance it until a consensus is reached on the legislation. “Taxation of third homes is an important subject, and I understand the importance that the Finance Minister attaches to the provision,” Kish said. “There is considerable public criticism on the subject,” he said, adding that changes will be made to it. Kish expressed the hope that it would in fact lower the cost of housing.

For his part, President Reuven Rivlin voiced criticism of the very existence of the Economic Arrangements Bill, calling it a “strange animal” in Israeli democracy. Speaking on Tuesday at a Finance Ministry conference, Rivlin, who is a former Knesset speaker, said the Economic Arrangements Bill essentially bypasses the regular legislative process.

It was initially used, he said, during a period of economic crisis in Israel. “But since then, for about 30 years, we have been conducting ourselves as if we are in that same crisis period.” A whole range of legislation is now injected into the bill, including provisions that are even controversial within the governing coalition, Rivlin said. A way needs to be found to bridge “the obligation of the government to govern,” on one hand, and “the obligation of each Knesset member to understand what he is voting on,” on the other. “Knesset members are public servants,” Rivlin noted, and although not all of them are interested in what they are voting on, those who are “need the time and the procedures to conduct an intelligent debate with their colleagues.” Directing his attention to the budget itself, the president said it is “not just another law,” but rather “a declaration of intent” reflecting the country’s values.

There is still disagreement on a number of provisions of the Economic Arrangements Bill. A proposed change as to how collective kibbutz communities are taxed is still a subject of disagreement between the kibbutzim and the Finance Ministry, for example. It will be referred to the Finance Committee with the understanding that it will be modified in accordance with any agreement that the two sides come to.

A provision on changes to the retirement age for career soldiers and to army pensions will be considered jointly by the Foreign Affairs and Defense Committee and the Labor, Welfare and Health Committee. There is also still no agreement on budgets for the Mossad intelligence agency and the Shin Bet security service, which are being referred to a joint panel consisting of the Finance Committee and the Foreign Affairs and Defense Committee.