Steinitz: Courts must rule more fiscally

Steinitz Courts are hur

Yuval Stenitz 248.88 aj (photo credit: Ariel Jerozolimksi [file])
Yuval Stenitz 248.88 aj
(photo credit: Ariel Jerozolimksi [file])
Finance Minister Yuval Steinitz on Monday criticized the judicial system for rulings that he said will cost the state millions and sometimes billions of shekels and cause severe economic repercussions. "In a time of an economic crisis we have seen the most relevant bodies showing responsibility, whether it is the government, the Histadrut Labor Federation or the employers, and this is one of the main reasons the Israeli economy has been able to come out of this crisis in relatively good shape," he said at the Globes Business Conference in Tel Aviv. "But unfortunately one very significant body in the system is not showing the necessary economic responsibility, and that is the judicial system in general and the Supreme Court in particular." Steinitz cited a recent High Court of Justice ruling on capital-gains tax that he said has prevented the government from collecting NIS 2b. a year in state revenues. "These are revenues that are missing in the state budget," he said. "Judges do not have to worry about how to finance changes of billions in the budget, but we have to. Responsible economic policy-making cannot be implemented this way, especially not in a time of a crisis." Steinitz said he was examining ways that would force judges to take into account budgetary and macroeconomic considerations in their rulings, to ensure that society's priorities are not being impacted. "In recent years, we have been witnessing a rising trend in court rulings taken by the Supreme Court and lower courts that result in heavy economic costs," Steinitz said. "While we at the Finance Ministry carefully examine every budgetary expenditure of a few million shekels, or instead have to consider tax benefits costing a few million shekels, the courts, nearly every quarter, make rulings that incur costs of hundreds of millions and sometimes billions of shekels. The courts disregard considerations affecting the strength of the economy." He emphasized the importance of maintaining discipline in economic planning as the key for the ability to safeguard the strength of the economy, whether it is keeping budgetary discipline or implementing conservative fiscal policies. Steinitz said one of the reasons the Israeli economy managed to emerge from the global economic crisis faster than most countries was the passage to a two-year budget and the insistence on sticking to fiscal restraint, while other countries spent large sums of money. "The darkness is now clearing, and we are starting to see a light at the end of the tunnel," he said. "Exports are recovering after plunging more than 30 percent at the end of 2008, an improvement in unemployment is visible, the deficit will be reasonable and the economy is gradually moving from negative growth to renewed growth."