Economic Arrangements, We Barely Knew Ye

Rivlin: Gov't is too lazy to legislate reforms properly

Knesset Speaker Reuven Rivlin has made it a mission to end a timeworn tradition at the Finance Ministry: slipping reforms into law through the back door. Specifically, it does so through omnibus legislation called the Economic Arrangements Law. Just as bad, the government "absurdly" uses the Economic Arrangements bill to castrate laws that it passed itself, Rivlin pointed out.

Rivlin: Gov’t has to stop using Arrangements to void its own laws.

The Economic Arrangements bill is always submitted together with the budget proposal for the following year. It is a hodgepodge of unrelated economic matters, all of which get voted on together in the framework of the single bill. Knesset members can't, for instance, weed out an article they don't like: The bill passes as one single unit or not at all.

Last week Rivlin summoned the Finance Ministry budgets director, Udi Nissan, after having discovered that the Economic Arrangements bill approved by the cabinet covered no less than 67 economic reforms. The treasury's gambit wouldn't work this time, Rivlin told Nissan in no uncertain terms: He would wield his authority as speaker of the Knesset to prevent the Economic Arrangements bill from even being brought up for voting, if it stays as is.

Rivlin shooed Nissan back to Finance Minister Yuval Steinitz to prepare a shrunken version of the bill. Otherwise, Rivlin clarified, Steinitz would face the humiliation of the Knesset Speaker creating a precedent of refusing to allow the government to put forward a bill.

This mechanism has led to abuses, Rivlin told TheMarker in an interview. The Finance Ministry has turned the Economic Arrangements bill into its main legislative conduit for reforms, Rivlin said. It slips in reforms that the government withdrew or the Knesset already rejected, or reforms that the ministry hopes to fast-track this way. The government as a whole is guilty of abuse, in Rivlin's view: It uses the law to bypass the mandate of the Knesset.

"It is my duty to restore the power of Knesset," he said: Parliament must not be the captive of the Economic Arrangements Law. "De facto, the Economic Arrangements Law changes the method of governance in Israel."

The Economic Arrangements bill isn't the sidekick of the budget any more, Rivlin said. The government doesn't strain itself to pass the budget: It strains to pass the Economic Arrangements bill. And he isn't just paying lip service to umbrage: Rivlin means to convene a special meeting of the Knesset Presidency, a panel of all the faction leaders, to advise them of his intentions regarding the Economic Arrangements bill.

"The Finance Ministry knows perfectly well that it couldn't push through a large number of the individual items by themselves, through regular legislation," Rivlin charges: It is trying to bypass the system. Legislating a budget for two years is bad enough, Rivlin said: "I won't allow further damage to be caused through this Economic Arrangements bill."

Did we do that?

Absurdly, the government also uses the Economic Arrangements Law to void laws that it itself passed, Rivlin went on. For instance, in March the Knesset passed a law to exempt student scholarships from tax. Steinitz himself had supported the law, which was sponsored by Yisrael Beiteinu member Alex Miller. During the Knesset plenum debate on the law, Rivlin quipped that the treasury would crush the law - and he was proved right. Under the Economic Arrangements bill, what did the treasury do? It limited the tax break to scholarships granted by the institution at which the recipient studied.

Nor does Rivlin appreciate the moving items that had been axed from the previous year's Economic Arrangements bill into this year's bill. Last year, for example, Steinitz yanked an item from the Economic Arrangements bill that would levy heavy administrative fines on people who filed falsified reports to the National Insurance Institute, to gain state support by fraud. Yet now there the item is again.

He rebuts the treasury argument that it is "impossible" to get government reforms through regular legislative methods. "In the last year the Knesset passed the new Bank of Israel Law and the establishment of an Economic Affairs Court," Rivlin points out. "Unfortunately, the government avoids bringing reforms to the Knesset during the year, out of laziness and reluctance to deal with the challenge."