Finance Minister Yuval Steinitz 370.
(photo credit: Marc Israel Sellem)
The cabinet overwhelmingly backed Finance Minister Yuval Steinitz’s proposal
Sunday to introduce legislation to make his controversial biennial budget format
a permanent part of the political landscape.
Subject to Knesset approval,
all future governments will be obligated to produce budgets every two years –
except during election years. As the next election must take place by October
2013 at the latest, this means the next biennial budget will be for 2014-15. The
legislation also leaves open the possibility for the finance minister and
Knesset to order a temporary reversion to a single- year format in the event of
an economic emergency.
The government introduced the unorthodox biennial
budget format in 2009- 10 and repeated the cycle in 2011-12 amid heavy
opposition criticism. Steinitz and Prime Minister Binyamin Netanyahu have
frequently credited these budgets with helping the Israeli economy maintain
stability and avoid the slowdowns suffered by other developed economies during
the past four years.
Steinitz noted in a press statement that Israel is
the first country to enshrine the format into law. Calling the reform
“revolutionary,” he said it also had the enthusiastic support of the
International Monetary Fund and Organization of Economic Cooperation and
Development Secretary-General, Angel Gurria.
His statement said the
measure would create more economic certainty, and have a positive influence on
bodies that work with or are supported by government ministries.
it would also increase Israel’s fiscal credibility with the private sector and
In response, Opposition Leader Shelly Yechimovich
labeled the measure “antidemocratic” and “anti-economic,” and accused the
government of leading the Israeli economy down the road to uncertainty. She
added that the government’s motive for introducing the measure was political
survival but that it would produce “destructive” results.
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“It is for good
reason that no other country in the world has adopted this dubious practice, and
that Israel remains the sole guinea pig,” Yechimovich said. “In contrast to the
finance minister’s claims that the biennial budget creates more certainty, the
reality is that the amount of alterations made to the budget in the past two
years has risen drastically because of the Treasury’s inability to plan so
She added, “Instead of engaging in responsible economic
planning that would benefit the citizenry… Netanyahu continues to put Israel
ahead of other Western states in socio-economic gaps and poverty rates, and now
embarks on an economic adventure which has proved to be inefficient and not
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