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Horror scenario or stalemate in government ministries: What will happen to the budget?
In the absence of an approved budget, government spending depends on unfinished legislative amendments, despite warnings from the professional echelon.
This means that government ministries are facing cuts of one hundred billion shekels, or alternatively a continuing budget - which is also irrelevant to 2021.
Cuts are expected in meetings, authorities and welfare
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State budget
Local authorities
Meetings
Sonia Gorodisky
Tuesday, 22 December 2020, 12:10
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In the video: The law to postpone the date of the dissolution of the Knesset fell (Photo: Knesset Channel)
The vote in the plenum tonight (Tuesday) against postponing the dissolution of the Knesset further deepens the budget crisis.
The Knesset is expected to disperse at midnight, and the immediate implication is the non-approval of the 2020 budget.
Assuming that the Knesset is indeed dispersed, without the approval of the budget for 2020 and 2021, the level of expenditure of government ministries next year will depend on some legislative amendments to the Budget Basics Law and the Basic Law: State Economy.
The professional echelon of the Ministry of Finance was prepared in advance for a scenario that seemed impossible.
In order to avoid the situation of economic catastrophe, already three weeks ago the memoranda of the law were distributed to the public for comment, which are supposed to allow the proper functioning of government ministries even without an approved budget.
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The law to postpone the date has fallen: the Knesset is expected to disperse at midnight
To the full article
Government ministries are facing cuts.
Knesset Plenum (Photo: Danny Shem Tov, Knesset Spokeswoman)
But not much has happened since.
The cabinet meeting that was supposed to discuss the bill was canceled four times and the bill no earlier, prompting the new Accountant General Yahli Rosenberg to send a scathing letter to the directors of all government ministries, warning them of unprecedented cuts. Rosenberg did not specify the scope, but estimated It was confirmed last night at a meeting of the Finance Committee that it was a cut of about a quarter of the expenses of government ministries. This will actually shut down their activities.
Yesterday during the Finance Committee's discussion, Rotenberg said that not approving the 2020 budget would throw the government into last year's budget. "In the extreme scenario where the 2020 budget does not pass and is thrown into 2019 numbers, the ability of government ministries to act according to the level of spending will be very, very limited."
Despite this, the Treasury broadcast relative optimism this morning. The Knesset will be dissolved, after which the memorandum will pass three Knesset readings by a majority of 61 MKs.
Seems like an impossible task nowadays, except the Treasury has learned from experience and is convinced that it will not be a problem to do so.
"That's the hard script."
Rotenberg (Photo: Gilad Artzi)
"We have made quite a few amendments to this section of the law in the past - before and after the formation of a government," a source in the Ministry of Finance noted.
"They have always passed by a very large majority. That is, there is a consensus on the need to make an expansion during the Corona period. It is unlike anything else in the Knesset votes."
The legislative amendments in question are not a substitute for an approved state budget, but they set the current state of government spending in the current year - these amounted to NIS 412 billion this year - and save government ministries from the numbers of 2019. In addition, the law memorandum allows continued use of corona boxes Except for budgets amounting to NIS 53 billion.
For comparison, the budget planned for 2021 was NIS 426 billion and the "extra-budget corona boxes".
Without amendments to the Basic Law, a scenario that currently seems less reasonable, the amount that will be available to government ministries next year will be about NIS 310 billion - about NIS 100 billion lower than government spending.
This is exactly the situation that the top finance officials warned last night.
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