No Budget for 2021, But Services Will Continue

As hopes for passage of a new state budget before the midnight deadline faded on Tuesday night, steps were taken to avert a chaotic outcome.

The Knesset approved extension of the financial security net for 2021 in the absence of a formal state budget, thereby allowing continued funding of the healthcare system and support for businesses.

The emergency add-on will provide some 70 billion ($21 billion) to ward off a general economic implosion, Ynet reported.

Finance Minister Yisrael Katz said the decision “will allow the continued function of the State of Israel from January and until the expected elections [in March] and the approval of the state budget.”

Katz added that without the measure there would be “a devastating blow to the country’s capability of providing services to Israel’s citizens and the assistance to those affected by the coronavirus pandemic.”

Ministers also voted to not adjust inflation according to the National Average Wage Index, which will prevent increases to electricity prices, property taxes and the minimum wage.

The bill will still need to pass first and second readings in the Knesset on Tuesday night.

Defense Minister and Blue and White chairman Benny Gantz grudgingly gave his support for the measure:

“The Prime Minister and Finance Minister have been criminally negligent in failing to bring in a state budget for six months – in violation of a blatant agreement and all for narrow, personal, and legal reasons,” Gantz charged.

“Despite this cynicism – I will not lend a hand to harm the citizens of Israel. This is not my way, this is not the way of Blue and White. We will continue to act responsibly, and of course in the decision, we will not allow the transfer of budgets to associates and political needs, but only for the essential needs of the citizens of Israel and the ministries.”

Katz added that had the bill not been passed, the result would be “a devastating blow to the country’s capability of providing services to Israel’s citizens and the assistance to those affected by the coronavirus pandemic.”

The bill will still need to pass first and second readings in the Knesset tonight to pass.