Lapid at faction meeting 370.
(photo credit: Marc Israel Sellem/The Jerusalem Post)
Finance Minister Yair Lapid decided to put an end to twoyear budgets in favor of returning to annual budgets starting in 2015, he announced Sunday.
The Finance Ministry cited error marginalization and timeliness as key reasons for rescinding the two-year budget. The decision was coordinated with Prime Minister Binyamin Netanyahu.
“Creating an annual economic workplan will make it possible to reduce the size of errors between forecasts of state tax revenues and domestic and global economic processes, and what happens in practice,” the finance minister’s office explained in a statement.
“It will also make it possible to locate and identify deficit [issues] in time and immediately create budget solutions and adjustments in the economic workplan for the financial year,” the statement continued. “The large differences between the biennial forecasts for state tax revenues and actual revenues led the economy to the huge overdraft with which we are now faced.”
Lapid’s decision brought accolades from MK Erel Margalit (Labor), who outspokenly opposed the two-year budget.
The Labor MK congratulated Lapid for “doing the right thing despite pressures from the [Finance Ministry’s] budget department to continue experimenting on the country’s budget.”
“The two-year budget,” Margalit added, “left behind a deficit of NIS 40 billion, which we are now battling.”
MK Nachman Shai (Labor) said Lapid’s decision showed the government was not united.
“It cannot be that the prime minister and his finance minister say the opposite things,” he stated.
“There is no place to be deluded. This government is leading Israel nowhere.”
Ori Greenfield, head of the macroeconomics department of Psagot Investment House, praised Lapid’s decision but emphasized that the resolution would not take effect until 2015.
“It is important to understand that the resolution is only for the 2015 budget and later,” he said. “The budget the government is currently working on is for the years 2013-2014.”
Greenfield said the reason for this was that the budget for 2013-2014 would likely be passed in July or August, and therefore there was no reason to separate it.
“We believe that the decision is good and correct and [as we have mentioned a few times in the last three years] the dual budget has more downsides than benefits,” he concluded.
Yuval Steinitz, the current international relations minister and former finance minister who championed the two-year budget in the previous government, declined to comment on the change.
Lapid also made a historic decision Saturday to appoint Yael Andoran as the Finance Ministry’s first female director-general.
Andoran has worked in the ministry’s budget department for 10 years, including a stint as deputy director when Netanyahu was finance minister. She previously served as head of Amitim Senior Pension Plans, which manages over NIS 160 billion in assets.
Globes contributed to this report.