The state economy law requires the government to place the revised state budget for 2024 on the Knesset table by tomorrow (Sunday), but the Ministry of Finance does not intend to do so. This is a second violation of the amendment to the state economy law from February 2023, which established special rules for budgetary conduct in the format of a biennial budget.
The government committed the first violation on November 1, 2023, when it did not submit the Cavalry Report to the Knesset, which shows the expected deviations between the planned 2024 budget and its current forecast.
Then, in December, another amendment to the law was approved, which allows the submission of budget documents to the Knesset to be postponed, but stipulates that the Knesset will have a month to discuss the budget. According to the amendment, it must be submitted by January 20, and approved by February 19. If a budget is not approved by then, another section of the law applies an automatic horizontal cut of tens of billions of shekels, which will bring about the paralysis of the government and will also seriously damage the military activity.
The legal advisor of the Knesset, attorney Sagit Afik, sent a letter on Thursday to MKs Naama Lazimi and Gilad Karib of the Labor Party, who contacted her regarding the matter: “As much as there is a violation of the law, there is no place for the work of the Knesset to be harmed. I see no reason that due to the violation of the law on the part of the government , the time available to the Knesset to discuss the budget will be shortened.”
Afik criticized the Ministry of Finance, which not only avoided submitting the budget on time, but also did not advance another amendment to the law, which would allow another postponement. Already in December, the finance committee learned that the government wants to approve the budget by March 1.
The draft of the government’s decision regarding the budget from Monday stated that the deadline for submission to the Knesset is January 28, a delay of eight days according to the existing law.
The Knesset will not discuss the amendments in depth
Israel, as is customary in the world, ran for many years on a one-year budget. However, in the last 15 years, the government preferred for political reasons to pass a biennial budget. It is not really a budget for two years, but a transfer of two successive annual budgets.
This practice, which was implemented on a temporary basis, was met with severe criticism by the High Court, mainly for trampling on the power of the Knesset, which can in principle overthrow the government if a budget is not approved.
This time, the 2023 budget was only passed in May 2023, five months from the beginning of the year and seven months before the 2024 budget came into effect. The amended State Economy Law states that if a budget is passed more than six months before its entry into force, update mechanisms are automatically applied, in cases of minor deviations – a reserve in the budget itself, the submission of the difference report to the Finance Committee and fixed deadlines in the law for making corrections to the budget, or automatic budget cuts.
All the rules are one-way, that is, they are intended to allow only cuts in the budget, not its increase. However, in the current situation, where the government wants to increase the budget by tens of billions of shekels due to the war, there is the possibility of submitting an additional budget for that year, and approving it in three readings in the Knesset. The non-submission tomorrow hurts the time the Knesset has to discuss the budget.
Approval of the budget ran into additional hurdles
The center of the coalition in the finance committee, MK Eliyahu Rabivo (Likud), supports budget cuts, and demands the cancellation of all coalition funds by adding some of them to the budget base and canceling the remainder completely. His position is close to that of the chairman of the committee, MK Moshe Gafni ( Torah Judaism), which also seeks to include sectoral funds in the base of the budget, in order to avoid repeated conflicts regarding them in each budget year, due to more restrictive legal procedures that apply to the use of coalition funds.
Six members of the Knesset petitioned against the government and the Minister of Finance, claiming that the 2023 budget, which was amended in December, was allegedly approved in violation of the law. According to the petitioning members of the Knesset, Vladimir Bliak, Merav Cohen, Mati Sarfati Hakabi (Yesh Atid), Naama Lazimi, Gilad Karib and Efrat Raiten (Labor) and the Berel Katznelson Foundation, the government did not present the Knesset with essential information required by law.
According to them, the budget proposal was submitted at a level of detail that was too low, of six figures and without verbatim detail, instead of the obligation to submit an eight-figure proposal, which details the allocation of funds at the level of the specific budget regulation. On top of that, no multi-year budget plan document was submitted. Members of the Knesset warn that even in the 2024 budget, the government may not meet the requirements of the law, and may not submit to the Knesset all the information required by law regarding the additional budget that is currently being formulated.
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