MKs: 2-year budget could reduce oversight

The Knesset Finance Committee raised the alarm that a clause, though intended to prevent runaway deficits, would concentrate power in the Finance Ministry.

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July 21, 2016 00:01
2 minute read.
Moshe Kahlon

Moshe Kahlon. (photo credit: MARC ISRAEL SELLEM)

 
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Critics of the planned two-year state budget voiced concern on Wednesday that the law might, among other things, reduce oversight.

One of the new clauses in the budget law would require the finance minister to act if, ahead of the second year of the budget, economic realities strayed significantly from projections.

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The Knesset Finance Committee raised the alarm that the clause, though intended to prevent runaway deficits, would concentrate power in the Finance Ministry.

“At the Treasury they will decide for themselves if there’s a gap, and if there’s a gap they will be able to cut the budget without approval in the Knesset,” Zionist Union MK Mickey Rosenthal said at a committee meeting on the issue. “This is very serious.”

Committee Chairman Moshe Gafni (United Torah Judaism) said that there was “no way” the bill would proceed without oversight provisions in such a situation.

Though ensuring oversight seems an innocuous enough solution, political complications could get in the way.

One of the reasons Prime Minister Benjamin Netanyahu pushed for a two year budgetary framework is because failure to pass a budget on time leads to automatic elections, thus inviting political instability.

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The original proposal, which passed its first reading earlier this week, stipulated that the new budget would be brought to a vote only in the event that the finance minister failed to make the necessary adjustments.

Depending on how the oversight issue is dealt with, it could provide an opening for the Finance Committee to block changes, force a vote, and reintroduce the political uncertainty Netanyahu was trying to avoid from the beginning.

Meretz MK Zehava Gal-On said the government was simply creating new problems to solve nonexistent ones.

“Why make the problems?” she said.

“Let them submit a one-year budget and there won’t be a problem. This is all a manipulation to allow political survival, and survive until 2019.”

Likud MK Miki Zohar pointed out that two-year budgets could have positive impacts: creating greater certainty and allowing for long-term planning in ministries, as well as avoiding the costs of potentially unnecessary early elections.

But even Finance Minister Moshe Kahlon has expressed his unease with the two-year budget, which he only agreed to in order to satisfy coalition demands. MK Rachel Azaria, from his Kulanu party, told the committee she was “not pleased with the two-year budget.”

Yisrael Beytenu MK Oded Forer suggested a solution by which the committee would be required to approve changes, but failure to do so would mean reverting to the original two-year budget. That, however, would ensure poor fiscal performance, given that the only impetus for discussing changes would be an expectation of missing budgetary targets.

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