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Lieberman's friends: The Bank of Israel has mobilized to support the budget
Against the background of the marathon debate on approving the budget in the Knesset, Lieberman receives a nod from the Central Bank: "The Bank of Israel points to the great economic importance of approving a state budget at this time and given that the economy has been operating since the beginning of 2020
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Bank of Israel
State budget
Avigdor Lieberman
Minister of Finance
Amir Yaron
Walla!
Of money
Wednesday, 03 November 2021, 09:12 Updated: 09:30
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While the debate over the budget is heating up, ahead of the expected vote, the coalition and the Minister of Finance, Avigdor Lieberman, are receiving help from the important financial institution in Israel, the Central Bank. Under the heading: "The Bank of Israel's reference to the discussion on the state budget and the government's economic plan," the Bank today published a position paper in favor of approving the budget.
The Bank's announcement reads: "Against the background of the Knesset debate on approving the state budget for 2021-22 and the accompanying economic plan, the Bank of Israel points to the great economic importance of approving a state budget at this time and given that the economy has been operating since the beginning of 2020.
The budget framework and its composition reflect a number of important macroeconomic considerations:
The need to take into account the state of the economy: On the one hand, the proposed budget will not curb activity until the economy has emerged from the corona crisis. On the other hand, it does not increase the structural deficit - which was high even before the crisis - which could lead to a deterioration of the debt-to-GDP ratio, and a reduction in the available resources to finance government investments needed in future budgets to raise labor productivity and deal with future crises.
2. The proposed budget addresses issues in the budget structure that are important for the efficiency of government services and their focus on needs that have changed in recent years. In particular, the budget increases the efficiency of allocating resources to the health system, and government investment in infrastructure, with an emphasis on public transportation that is essential for long-term growth and expansion of housing supply in areas of demand.
3. Approval of the budget will improve the continuity and planning ability of the work of government ministries in many areas, and will reduce operational uncertainty regarding the provision of some government services, and various supports that are particularly critical in the social sphere.
The approval of the budget will facilitate the work of the government as well as the business entities that rely on their work plans, among other things, on the government's policy and its expected actions. "
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Minister of Finance and Governor of the Bank of Israel.
Continuation of a wonderful friendship (Photo: Ministry of Finance spokeswoman)
The Bank of Israel goes on to specify in its announcement other reasons why it believes it is important to approve the budget:
"Along with the budget, the Knesset is presented with a package of structural measures that includes important reforms for sustainable growth including: promoting the construction of metro metropolitan Tel Aviv, removing barriers to imports, streamlining government regulation and processes to accelerate residential construction and investment in infrastructure support.
in addition, the economic plan includes measures have a lasting impact on the budget and employment in the economy as a decision to change the system of designated bonds and raising the retirement age For women - accompanied by measures to alleviate low-income women who will be harmed by the move, some of which will probably require improvement in the future, based on the experience gained in their implementation, but the content of the reforms is important and desirable.
Another important move reflected in the proposed budget is the five-year plan for the development of Arab society.
This plan includes the allocation of considerable resources for the development of human capital, infrastructure and employment in the localities of Arab society and in the cities involved.
This move is of great importance for the sustainable improvement of economic welfare in Arab society, but also of great benefit to the entire economy, which will benefit from the increase in human capital and the increase in labor productivity that the program will lead to. "
Chairman of the Manufacturers' Association, Governor, Minister of Finance, Chairman of the Histadrut and Chairman of the Presidency of the Business Sector. The Bank of Israel has a key role in formulating the package deal that the parties are expected to announce today (Photo: Ministry of Finance spokeswoman)
In contrast to the relations that existed between some of the finance ministers in the past and the governors of the Bank of Israel, it seems that the relations between the finance minister, Avigdor Lieberman and Prof. Amir Yaron, the central bank governor, are good - and the two work in full cooperation.
This is also evident from the discussions surrounding the package deal in the economy, which is expected to be signed today between the Ministry of Finance, the Histadrut and the employers' organizations - a deal in which the Bank of Israel and its leader were full partners.
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