Technical note: Mid-Year Budget Cuts Common Occurrence in Israel
Dr. Aaron Lerner 4 August, 2020
The explanation now being offered by Likud ministers and MKs assigned to
justify the attempt to renege on the signed commitment to pass a 2020-2021
budget as per the Likud - Blue White coalition agreement is that a budget
cut will be required in 2021.
Curiously, the Israeli reporters interviewing these talking heads for some
reason decline to point out that there is a mechanism in place for making
budget cuts in course of a budget year and that in fact typically billions
of shekels are cut from the budget in the middle of the year.
Back in June 2019, for example, there was a 1.2 billion shekel budget cut
with Prime Minister Netanyahu saying that "budget cuts are a difficult thing
but there's no alternative".
While the budget cuts are typically made in order to divert the funds to
spending on another project or program, the very same mechanism could be
used to divert the funds to cover part of the mountain of government debt.
Bottom line: the ONLY reason not to honor the agreement and pass a
2020-2021 budget today is in order to leave Prime Minister Netanyahu the
option to run while still prime minister in snap elections at the end of
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