Triennial Budget Faceoff Looms


The battle over the budget has started — though not in the Knesset, where the opposition normally lies in wait to snipe at every suspicious allocation — but in the Finance Ministry, where officials are bridling under pressure to draw up a three-year document.

Prime Minister Binyamin Netanyahu is pressing for the upcoming budget to cover the years 2015-17, and has in the meantime put the budgetary process in the Knesset on hold until he can get his government to go along.

Ministry of Finance budget director Amir Levy told Netanyahu that he is strongly opposed to a triennial budget. His boss, Finance Minister Moshe Kahlon, has yet to take a position, according to Globes.

Although Netanyahu has argued for an extended budget in the name of economic stability, observers say his desire for it is political. The passage of every budget is fraught with new demands from coalition partners, creating more strain and increasing the chances that the government will fall. The fewer budgets to pass, the less strain on the coalition, the longer its life expectancy.

There are arguments for and against a multi-year budget. The Ministry of Finance has argued revenue forecasts prepared over two years in advance are naturally unreliable due to unforeseen events. This throws off projections of such crucial matters as state deficits.

However, not all agree. For example, Bank of Israel Research Department Macroeconomic and Policy Division head Adi Brender, considered the bank’s foremost expert on these matters, believes that a multi-year framework is viable as it relates to all the major budgetary considerations.