Government Spending Trends Upward

Israeli government spending rose by over 50 percent during the past 10 years, and the bulk of it was in the civilian sphere, according to Globes on Wednesday.

Figures released by Accountant General Rony Hizkiyahu show that total expenditures went up in the period between 2010 and 2017 from NIS 202 billion to NIS 310 billion.

The trend got stronger in 2017, as data indicated a spending increase equal to one percent of GDP.

In comments on the annual report, Hizkiyahu stated that the Ministry of Health’s budget has grown by 77 percent since 2010, the Ministry of Labor, Social Affairs and Social Services’ budget by 68 percent, and the Ministry of Education’s budget by 65 percent.

These changes occurred while the Ministry of Defense, the traditional address for spending increases, remained roughly the same proportionally.

The report shows that spending by civilian ministries reached a peak of 19.3 percent of GDP in 2017, one percent higher than in 2016. Defense spending remained steady at 5.2 percent of GDP, while interest payments on the government debt dropped to from 2.5 percent of GDP in 2016 to 2.3 percent in 2017.

“Obviously, this increase in government spending would have been impossible without a consistent and substantial rise in GNP and tax payments to the government on the one hand and responsible economic management on the other, which has made it possible in recent years to lower the debt burden and interest payments and divert more resources to the welfare of the people,” the report noted.

State revenue was also up — from 25.4 percent of GDP in 2016 to 26.4 percent of GDP in 2016 — but the report cautioned that it could not be relied upon for future big spending.

Higher revenues were attributed to a lower tax on dividends, which increased current government revenues at the expense of future revenues, and a one-time, NIS 4 billion windfall from taxes of Intel’s acquisition of Mobileye. One-time revenue totaled NIS 20 billion in 2017, but the state reduced this sum by NIS 4.2 billion deposited in a property tax fund.