The Treasury’s decision to produce yet another twoyear budget – for 2013-2014 –
is already drawing fire, no less so than did its two predecessors.
fundamental rationale against our annual budget rites is that delaying some of
the protracted haggling and ensuring a longer fiscal cycle allows the budget a
chance to actually impact the economy, before the next round of aggressive
horse-trading begins. In other words, the aim is to decrease the commotion and
curtail the controversy.
The expected hullabaloo over the 2013 state
budget was the prime reason for calling an early election. It was feared that
each Knesset splinter would extort a heavy price for its support, aware that
without passing the budget the government falls. The logic behind the early
election was to try for a stronger coalition.
Yet the precise opposite
occurred. The new 19th Knesset is even more fragmented and makes the 18th look
good. This adds impetus to preempting the annual budget agonies.
present setup has all the makings for a worsethan- ever showdown over the
budget. The coalition, whenever it is formed, will perforce be more of a
crazyquilt than the previous one. Against this background, looming menacingly,
is a growing national deficit that require spending
Nevertheless, contradictory spendthrift pressures are
exacerbated by populist demands left over from the 2011 social protests and
fueled by the fervor of assorted slogans that propelled Yair Lapid’s neophyte
Yesh Atid list to overnight electoral success.
Our first two-year budget
– for 2009-2010 – was at the time hyped as a one-time emergency measure. That
the Treasury chooses to go down the same path for the third time, argue
opponents of this course, is nothing short of abuse, underscoring that in the
Israeli context there is nothing as permanent as something
Indeed, the 2009 innovation was ad hoc. The entire world
then reeled from the multiple afflictions of the global economic crisis that
exceeded ordinary recessionary spates and alarmingly resembled
Israel’s economy did better than others but was not
invulnerable to the ill-effects. Moreover, Ehud Olmert’s government failed to
pass the 2009 budget. By mid- 2009 the country was still run on 1/12th monthly
of the 2008 budget. The resultant strain on national resources was
In response, the then-new Netanyahu administration
submitted its first two-year budget, geared to administer more than temporary
palliatives for what was left of 2009 and prepare for 2010.
clamor for a return to the one-year budget maintain that the longer the budget’s
applicability, the lower its flexibility. At times of drastic change it might be
harder to make the necessary adjustments with the longer cycle. Yet fix-ups
would be just as necessary in the event of crises triggered during a one-year
In any eventuality, tools for modification always
The more trenchant argument is that a two-year budget strengthens
the executive branch, weakens the legislature and hence upsets a delicate
Extended budgets do theoretically rob parliamentary pressure
groups of an entire year’s worth of political capital that they rake in as each
budget-season reaches its climax.
Herein lies the core cause for shrill
recriminations. The two-year budget obviously deprives politicians of
They lose half their ability to make trouble – instead of yearly
mischief, they are reduced to a two-year cycle.
Budget time offers
matchless opportunity for unabashed political blackmail, predicated on the
premise that no government can lift more than its political weight. No coalition
can dismiss the interests of its components.
This time, too, we can
expect the familiar pandemonium, the red herrings, the outrageous extortion, the
threats and the inevitable real and/or apparent compromises.
budget, however, can spare us the same hijinks next year. Industrial quiet will
reign longer and time will be secured for less jittery economic
Plainly put, political tugs-of-war hurt the national economy.
The less frequent the tussles, the better off we are.
clearly allow greater focus on efficient policy implementation, which is
critical given still heightened uncertainties in the global economy and mounting
geopolitical concerns in the region.