Budget Lacks Time and Money

Netanyahu will try to extend the deadline for passing a budget, which will carry a heavy deficit because of the recession and coalition promises.

Tzvi Ben Gedalyahu ,

Lack of time and money may delay budget
Lack of time and money may delay budget
Israel News Photo: (illustrative)

The lack of time and money, the two classic commodities that are limited, have forced the upcoming Netanyahu government to seek an extension for passing a new government budget.

The annual battle over money usually must be concluded by March 31 in order for a government to stay in power, but the timing of this year’s Knesset election has pushed back the deadline by 45 days after the new government takes office -- probably this Tuesday -- to May 15.

However, the Passover holiday and days marking the Holocaust, fallen soldiers and independence of the State of Israel leave the government only 20 working days in which to approve a budget. The process is even more complicated for the government because of its promises to coalition partners for social and economic outlays at the same time that government revenues are dropping due to the recession.

Prime Minister-designate Binyamin Netanyahu’s negotiating team has suggested that the law be changed to allow the government at least 90 days in which to pass a  budget, which would push back the deadline to June 28.

The proposal was prepared by Knesset Member Yuval Steinitz’s “100 Days” team that outlined policies for the first three months of the new government. One of the most important changes it seeks is to allow American fiscal guarantees to be increased by up to NIS 30 billion ($7.1 billion). The team also wants corporate and individual taxes to be cut.

The government had been enjoying a rare budget surplus for the two previous years, until tidal waves from the American financial crisis washed out Bank of Israel and Finance Ministry confidence that the unprecedented growth and stability would forestall a recession.

Netanyahu, who is widely credited for having launched a long period of economic growth when he was Finance Minister during the Sharon administration, may take over the ministry again during his tenure as Prime Minister.

He personally convinced Prof. Stanley Fischer to leave his prestigious position as a senior officer of Citibank and to move to Israel and become an Israeli citizen in order to head the Bank of Israel.

The move turned out to be fortuitous for Fischer. Citibank’s stock shares plummeted during the financial crisis, and the company was on the brink of bankruptcy until the American government bailed it out.