Deputy prime minister Gantz on the last day of the 23rd Knesset saved Jobs of thousands employees

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by Ifi Reporter Category:Capital Market Dec 22, 2020

Blue and white chairman and deputy prime minister Bemi Gantz on the last day of the 23rd Knesset, the leadership he so desperately lacked during his tenure in the Netanyahu government. He preferred the good of the state over his personal good and agreed that the government would approve a continuing budget. The Finance Ministry's bill according to which the follow-up budget for 2021 will not be based on the last approved budget - for 2019. According to the decision, another NIS 100 billion can be spent, which means that instead of a NIS 100 billion cut in ministry expenses, the cuts will be For only NIS 15 billion.
The decision was made after the 2020 budget dream vanished. The Ministry of Finance's proposal softens the continuing budget for 2021, when without its approval, government ministries would have been required to cut NIS 100 billion from their current activities and procurement, a total of just under NIS 200 billion, about half of the NIS 400 billion budget. The rest of the budget, over NIS 200 billion, is rigid and is allocated to salaries and commitments that cannot be changed.
The Treasury bill separates the overall budget framework from the payment of the government debt fund; Separates the expenses of the corona into a separate package (as happened in the emergency decisions during 2020 and stipulates that the continuation budget of 2021 will be based on the actual budget divided in 2020, ie NIS 411 billion) and not on the last budget approved in the Knesset (2019 budget NIS 397 billion); And allows for the transfer of surpluses from one year to the next, thus allowing for slightly more free activity to government ministries.
During the third day, a pressure cooker was put on the deputy prime minister, Bnei Gantz - both by the Ministry of Finance and the ultra-Orthodox factions (since extensive cuts will mainly hurt the support coming from yeshiva students) - and eventually the move reached the cabinet table. The bill is expected to receive Knesset approval at night. During the day, Ganz's people lamented that Israel Katz, who could have brought in the 2021 budget in recent months but chose not to do so (as instructed by Prime Minister Netanyahu), remembered at the last minute to press all parties to approve the bill as if there was no choice. To a large extent this is true, but Netanyahu and Katz's application worked, and Gantz and his party did not announce elections earlier, which could have shortened the duration of the follow-up budget in 2021. And at this point, Hashem is less relevant given the fact that the solution is so necessary.
While there is usually widespread agreement among Knesset members mainly expressing populism, this time it is logical legislation that no Knesset member can really oppose. It has no political victory, but mainly economic survival. After all, this is not a perfect solution in any case. Instead of a budget of NIS 426 billion that should be in 2021, the follow-up budget will be NIS 411 billion, a gap of NIS 15 billion that is very burdensome for government ministries.
The bill also has a downside
In fact, the bill also has a downside. It is another stage in the trampling of Israel's fiscal rules, and in such a sensitive period against the backdrop of the Corona crisis, in which the Netanyahu-Ganz government trampled on every possible rule (including a Basic Law stipulating that a government that fails to pass a budget within three months) could have a price future. While separating debt from the overall framework, and putting the corona aid package in a separate box, are sensible and not far-reaching moves, the clause stating that the follow-up budget will not be based on the approved budget but on the actual budget is what diminishes politicians' incentive to approve a budget. Just like the decision to postpone the end of the government even though it did not approve a budget, it is a slow but sure break of everything that is supposed to curb a government without a mandate, and although it is a temporary order, it may come back to us in the future as a boomerang when we see new moves.

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