Israel's 2-year budget structure heads to final vote after dramatic debate

The budget structure bill still does not allow for an opportunity for there to be no budget for 2018, which would trigger an early election.

By
July 28, 2016 16:06
4 minute read.
Knesset

The Knesset plenum . (photo credit: MARC ISRAEL SELLEM)

 
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After over a week of debates, a filibuster, and mutual recriminations from the coalition and opposition, the Knesset Finance Committee voted to authorize the twoyear budget structure Thursday for a final vote expected to take place next week.

The breakthrough came in the form of an agreement struck between coalition and opposition MKs. The main point of conflict was the opposition’s demand for more oversight authority the Finance Committee will have at the end of 2017, before the budget goes into its second year. Finance Committee chairman Moshe Gafni (United Torah Judaism) planned to add articles requiring Knesset oversight before 2018 to begin with, which the committee’s members seemingly agreed to last week, but in a later meeting, the opposition protested they were not enough.

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“The Finance Committee will be part of every change made between the two years of the budget,” Gafni said, following negotiations with the opposition and the Finance Ministry. “These agreements will allow us to pass a bill that will be good for the citizens of Israel and the public interest for the entire public for two years.”

Gafni said the updated version of the budget structure bill includes significant changes that will allow greater oversight starting in November 2017.

According to the version of the bill going to a final vote, the Finance Ministry will have to submit a report with fiscal data, showing how well it kept to its targets, no later than November 1, 2017, giving the Finance Committee enough time to discuss any changes necessary in time for 2018.

If the deficit grows larger than expected, the finance minister will be able to use up to NIS 3.5 billion of funds reserved for budgetary adjustments in 2017, and over the two years, there will be a “safety cushion” of up to NIS 10b. in case of unexpected economic developments.

If changes are necessary, the government may cut one percent of the budget, meaning NIS 3.9b., and will have to bring the details – meaning, what will be cut in which ministry – to the Finance Committee for authorization.

Raising taxes or any other ways to avoid cutting the budget must also be brought to the committee.

“The Finance Committee will not allow random cuts in projects and plans without oversight and a public debate,” Gafni explained.

The final agreed-upon change to the bill is that 2019’s budget must be for only one year, since 2019 is an election year, in order to avoid the situation in 2015, when the government fell apart at the end of the previous year and there was no budget for most of the year because of the election and subsequent coalition negotiations.

The two-year budget still has a stabilizing effect on the political field, which is the reason Prime Minister Benjamin Netanyahu pushed for it.


The budget structure bill does not allow for an opportunity for there to be no budget for 2018, which would trigger an early election.

Earlier this week, opposition MKs attempted to filibuster the vote by submitting thousands of objections to the bill, an effort led most prominently by MK Stav Shaffir (Zionist Union). On Tuesday, debates continued until 1 am.

On Wednesday, things took a nastier turn, when coalition chairman David Bitan (Likud) decided to punish the opposition by refusing to negotiate with them or pass any of their bills. In response, the opposition decided to boycott the plenum. Knesset Speaker Edelstein was able to convince the sides to talk to each other again, and the plenum meeting and votes proceeded as usual.

On Thursday morning, Shaffir had submitted over 6,000 objections for debate, but Knesset Legal Adviser Eyal Yinon blocked her efforts, saying that the opposition has a right to make things difficult, but not impossible for the coalition, allowing the committee to use an accelerated voting method.

Yinon’s intervention led the coalition and opposition to negotiate and come to the agreement on how to change the budget structure bill.

Opposition MKs claimed a victory, saying their filibuster led the coalition to give in.

“The pressure worked,” Shaffir said. “The government had to fix its draconian and insane bill, and now the Knesset will have the right to continue overseeing the citizens of Israel’s tax money, as I demanded and as is appropriate in a democracy. We won’t stop fighting for a fair budget for all of Israel’s citizens, even if it takes another 1000 nights of work.”

The coalition was less impressed by the filibuster, with MK Rachel Azaria (Kulanu) saying the exact same results could have been achieved on Tuesday.

“Nothing was achieved by the filibuster; all of these changes were already on the table two days ago,” she stated.

Coalition coordinator in the Finance Committee Miki Zohar (Likud) said “the only thing that happened as a result of the filibuster is that the public had to pay overtime to Knesset workers.”

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