Finance Ministry accountant general Rony Hizkiyahu announced this week that he will be leaving his position in October, more than a year before his term is meant to end, even if the state budget hasn’t passed by then. The background is the ongoing inability of the government to pass a budget.
Israel has been without an approved budget since the beginning of the year. The budget with which the accountant general has been managing the government was actually passed in 2017, and by force of circumstances – namely, three consecutive elections – has been the basis for government activity well into 2020. The result is a gap of between 15 billion and 20 billion shekels between the budget framework and the actual budgetary needs.
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Hizkiyahu deferred the cuts required to cover those 15-20 billion shekels until the end of the year, expecting that the new government would immediately approve an updated budget. But three months have gone by since the government was established and the 2020 budget is still not approved. Lacking a budget, it will be necessary to make the cuts in the months that remain until December. We’re talking about an estimated cut of 3 billion shekels a month from the ministries’ budgets. This would deal a massive blow to the opening of the 2020-21 school year, to community centers and informal education, to all nonprofit associations engaged in welfare activities, and more.
Without an approved budget, Israel will be breaking its promises to the international credit rating agencies, which could lead to a lowering of its credit ranking. Such a nightmarish scenario would substantially shorten the route to a dangerous financial crisis. In the midst of the worst financial crisis Israel has experienced since 1985, and as it needs financial stability more than anything to overcome the coronavirus crisis, Prime Minister Benjamin Netanyahu is threatening to push Israel into the abyss. It’s hard to think of a clearer badge of shame for “Mr. Economy” Netanyahu.
Despite the prime minister’s false demagoguery, the budget crisis is a fabricated one. There would be no problem passing a budget tomorrow. But to do this, he must agree to approve a two-year budget, for 2020 and 2021, just as he committed to do in the coalition agreement. This isn’t merely a justifiable demand by his partner in this emergency government, Benny Gantz; the professionals in the Finance Ministry support this, since at this point it is too late to be passing a budget for 2020 alone.
Netanyahu is aware of the economic logic and knows it’s the right thing to do, but what do the interests of the country have to do with his decisions as prime minister? Netanyahu knows that if he agrees to a two-year budget, he will lose the stick with which he can dismantle the government in 2021, and then he’ll have to fulfill the rotation agreement with Gantz. As usual, he is putting his personal survival before the survival of the State of Israel.
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The above article is Haaretz’s lead editorial, as published in the Hebrew and English newspapers in Israel.