The total cost to Israel’s economy of four national elections in the past two years is about NIS 14 billion (around $4.24b.), according to Dr. Roby Nathanson, CEO of the Macro Center for Political Economics.
Each election costs the economy about NIS 3.5 billion, according to the thinktank’s analysis compiled by economist Ohad Porat on behalf of Lahav, the Israel Chamber of Independent Organizations and Businesses.
The cost of the day off from work for the election holiday is about NIS 2.6 billion, Nathanson said, due to lost productivity and sales for companies and wasted salary expenses. Because Election Day is a legal holiday, work that day is considered overtime and subject to 200% wages. Lahav and other organizations have long called for Israel to cancel the election holiday, claiming the cost to the economy is too great.
Nathanson noted that some industries benefit from the day off, like those in the entertainment and restaurant industries. Those sectors benefit from a day off, to the tune of about NIS 1 billion. However, Nathanson said, it would not be accurate to calculate that increase as offsetting part of the cost to the economy, as the industries that gain are unlike those that lose out.
Next, the cost of conducting elections, including preparing the polls and ballots and manning the polling stations, is about NIS 675 million, Nathanson said. Tuesday’s election was Israel’s most expensive ever, due to the costs of running special coronavirus polling stations and for other health and hygiene considerations.
State funding of the parties’ election campaigns averaged nearly NIS 170 million each over the four campaign seasons, Nathanson said. The state generally provides about 80% or more of the money used for the campaigns, the highest such rate in the Western world, according to Dr. Assaf Shapira, director of the Political Reform Program at the Israel Democracy Institute.
These costs don’t include the general damage done to the economy by the fact that Israel doesn’t have a state budget, which means that many urgent economic matters are on hold, Nathanson said.
Tuesday’s election was held at a time when Israel looks to emerge from a pandemic that prompted three national lockdowns and wreaked havoc on numerous industries. Each week of lockdown cost the economy another NIS 5 billion, Nathanson said, citing other research compiled by his organization.
Noting the latest voting numbers, Nathanson expressed skepticism that a government would be formed this time around, and said he feared a fifth election is likely. Alternatively, if a government can be formed in the coming weeks, the Knesset would probably only be in session for about five months in 2021, taking recess during August and for the High Holy Day season in September. Nathanson concluded with a statement of optimism that, with the pandemic hopefully winding down in Israel, the economy is strong and will likely recover quickly.