With a particularly critical fiscal budget waiting to be passed and coalition partners being less than cooperative, speculation is increasing that Prime Minister Binyamin Netanyahu will call for early elections sometime after October 15, when the Knesset reconvenes. Educated estimates forecast that national elections, currently slated for October 2013, could take place as early as January.

Critics of the move argue that narrow political interests are driving the push for early elections. Preventing popular political figures such as Arye Deri and Ehud Olmert from getting properly organized in time is supposedly one of the reasons politicians both in the opposition and in the coalition have united behind the idea to move up elections.

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Netanyahu might also wish to avoid making painful – and unpopular – budgetary cuts right before the elections.

The right-wing coalition headed by Netanyahu that will most likely be elected again (perhaps with some changes in the coalition partners) is also said to be interested in holding elections immediately after the US vote on November 6 to make it easier to stand up to pressure expected from President Barack Obama – if he gets elected to a second term as polls are predicting – to move forward with the Palestinian peace process.

In addition, Netanyahu is apparently interested in cashing in on his relative popularity compared to other potential candidates for prime minister.

But early elections might actually be in the nation’s interest.

The 2013 budget will be particularly critical. Fiscal discipline must be maintained while at the same time ensuring that deep budget cuts do not stifle a fragile local economy.

The Bank of Israel has already downgraded its forecast for 2013 GDP growth from 3.5% to 3% “against a backdrop of a continued global slowdown and [local] tax increases.”

Lower than expected GDP growth will make it harder for the government to keep its debt-to-GDP ratio to 3%.

Proposed cuts of between NIS 15 billion and NIS 17 billion are likely to have a significant impact on public sector employees, young families seeking affordable housing, and large families that rely on government transfers such as child allowances, among others.

Without early elections, a budget must be submitted by November 1, at which point the Knesset has two months to pass it. With Shas and Yisrael Beytenu opposing central aspects of the Finance Ministry’s budget proposal, it is highly unlikely that the needed cuts can be agreed upon before this deadline.

Economic concerns such as increased competition and better, more affordable education and medical care have come to the forefront of the public’s consciousness after years during which diplomatic and security issues have dominated political agendas. Only the Iranian threat continues to vie with economic issues for the voting public’s attention.

Under the circumstances, it makes good sense to hold elections before the budget is passed. This would enable the public to debate burning economic issues. It would also give political parties an opportunity to articulate their economic visions. The government elected after this process takes place would be better positioned to pass the 2013 budget.

The downside of calling early elections is that there will be no new fiscal budget prepared for the first months of 2013. Instead, the 2012 budget will remain in effect without the necessary adjustments made for population growth and inflation. And none of the pressing economic issues will be addressed. A proper 2013 budget will probably not be in place until May or June.

Rushing to pass a budget before November, however, increases the chances that the government could cave in to populist demands. And lack of fiscal discipline at such a critical time could have adverse affects, including the lowering of Israel’s credit rating by Standard and Poor’s, Moody’s and Fitch.

If Netanyahu does indeed decide to call elections in January, February or March, he should consider one additional move: Doing away with making election day a holiday.

In the US and other western countries, no vacation is given to voters.

At a time of global economic stagnation, Israel can ill afford the more than NIS 1 billion loss to our economy as a result of making election day a national holiday.

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