2021 Budget Worth NIS 426B to Be Presented to PM on Monday

YERUSHALAYIM (Reuters) -
A general view of the Finance Ministry in Yerushalayim. (Flash90)

The Finance Ministry will present a long-awaited 2021 state budget to Prime Minister Binyamin Netanyahu on Monday that will total NIS 426 billion ($128.5 billion), a ministry source said on Sunday.

The source told Reuters that the budget will include 40 to 50 reforms aimed at helping the economy recover from the coronavirus pandemic and does not include any tax increases.

Israeli media noted that the 2021 budget to be presented is only 15 billion shekels more than the unapproved 2020 budget and based on a growth estimate of as much as 5%, versus an expected contraction of up to 8% this year.

Finance Minister Yisrael Katz said that he intends to bring the budget to the Cabinet for approval by mid-December.

However, Israel’s leaders are locked in a political standoff over the budget, so it is unclear whether the budget will be approved.

Failure to approve a 2021 budget by March 31 would trigger a snap election, which would be Israel’s fourth in two years.

The political squabbling has also prevented the 2020 budget from being approved. That must be approved by Dec. 23 or it could trigger a new election.

Israel is still using a prorated version of the 2019 budget approved in 2018.

Last week, Israel’s central bank urged the government to approve a 2021 state budget as soon as possible to avoid further fiscal restraint when the economy needs stimulus to weather the coronavirus crisis.

Israel has approved a stimulus of more than 140 billion shekels to help businesses and households cope with the effects of the virus.