Two-Year Budget Bill Passes First Reading

YERUSHALAYIM -

The two-year budget for 2017-18 came significantly closer to becoming a reality late Tuesday night as the Knesset voted for approval in its first reading.

While Prime Minister Binyamin Netanyahu has advocated the two-year framework as promoting stability and facilitating long-range planning, critics have insisted that it is politically motivated, aimed at avoiding the annual budget fights that strain coalition ties.

“The government’s economic policies are motivated by cynical political considerations and not prudent and responsible economic views,” charged MK Yaakov Peri (Yesh Atid) “The least the government can do is admit there is no real economic advantage to a two-year budget and there is no need for it beyond political survival.”

Meretz No. 2 Tamar Zandberg said that “not one professional thinks that a two-year budget is good for the market. From the State Comptroller to Finance Ministry staff, economists to the Knesset Research and Information Center, even the finance minister himself opposes a two-year budget.

“Not one country in the world that tried a two-year budget got good results. Last time Israel tried it, we got an NIS 40 bn. deficit,” Zandberg added.

Israel tried a two-year budget for the first time in 2009-2010 with disappointing results. In 2012, the deficit was double the target for 2011-2012, requiring cuts and tax increases. That experience has been cited as evidence that, given the rapid changes in the global and local economies, a national budget cannot be formulated two years in advance.