After a decade in transport and a year in the Foreign Ministry, the Minister takes on the challenging role

• Israel Katz

  Photo: 

  Alex Kolomoisky

In an exchange ceremony held at the office with outgoing Finance Minister Moshe Kahlon, the new Finance Minister Israel Katz took office yesterday.

According to budget laws, a new government is required to pass the state budget in the Knesset no later than August 18. 

Despite this legal obligation, a precedent for rejection has already been set. In 2015, under an hour's order, the government, with the approval of the Knesset, postponed the submission of the state budget by 175 days, following the establishment of the government. This time, too, there may be a special rejection, as there are a number of issues that could delay the budget.

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Transfer of units and powers between various government ministries, the establishment of new government ministries, and in particular the transfer of units and powers from the Ministry of Finance back to the Ministry of Interior (Planning Administration and Local and District Planning and Planning Committees), return and transfer of units and powers from the Ministry of Finance to the Ministry of Construction and Housing (Israel Housing Authority) , The transfer of the Government Companies Authority from the Ministry of Finance and the transfer of the Civil Service Commission from the Prime Minister's Office to the Ministry linking the government with the Knesset, a process that will require special hourly provisions. Also, splitting the Ministry of Energy and Water into two government ministries, energy and higher education and water resources requires a special teaching time.

The approved budget should be bi-annual, for this year, which has been running for more than 5 months without a budget and for the next year. 

The outgoing finance minister opposed a biennial budget - and in contrast, Prime Minister Benjamin Netanyahu actually wanted a three-year budget for 2023-2020. 

Finance Minister Israel Katz's biggest dilemma will be between the imposition of new taxes and cuts in government ministries, including the Ministry of Defense, but apparently without cutting the Ministry of Health budget. The dilemma would be whether to raise the general VAT, impose more consumer taxes or raise the income tax further.

International credit rating company S&P has given a rare glimpse of dilemmas on Treasury Secretary Israel Katz's spending: Corona spending exceeds NIS 100 billion, domestic product shrinks by more than NIS 70 billion, budget deficit could skyrocket to NIS 140 billion. The rating agency estimates that by 2021 the economy will return to rapid growth of 6% - but only in 2022 will the budget deficit return to its 2018 level. 

New Inspector 

Significant exchanges were also made at the Bank of Israel, with Yair Avidan taking up his position as Supervisor of Banks, instead of outgoing Superintendent, Dr. Hedva Bar, who, due to the Corona crisis, has slightly extended her term.

"I am excited and prepared to enter my challenging and binding role," said Avidan, who has overlap for the position in recent weeks. Upon taking office, Avidan said: The Banking Supervision Department will continue to work to ensure the stability of the banking system, its continued development and support of the economy, and the welfare of its customers, while supporting its technological and digital development. At the same time, we will ensure access to the banking system for all sectors and population groups, supporting its continued opening to competition while maintaining and ensuring transparency and fairness. 

The Governor of the Bank of Israel, Prof. Amir Yaron, welcomed him and said that "Yair entered the position at a challenging time. His 30 years of experience in many positions in the banking and financial system have given him the knowledge and capabilities required to lead banking supervision." 

Prof. Yaron noted that Avidan took part in the professional discussions and decisions regarding the Corona crisis. Yair Avidan is another appointment of Prof. Yaron, who appointed his deputy, Andrew Abir, and Prof. Michel Strabaczynski as director of the Bank of Israel Research Division.