Finance Ministry: Budget Must Pass ASAP — But Not at Any Price

(Communicated by Finance Ministry Spokesman)
Jerusalem, 18 January 1999

Finance Ministry Director-General Ben-Zion Zilberfarb today (Monday) 18.1.99, speaking before the Judges Association in Eilat, said that the Knesset must make every effort to pass the state budget and Arrangements Law, as submitted by the government, as soon as possible. "However," he added, "the budget should not be passed at any price. The proposed budget is intended to accelerate growth and create new sources of employment. Allocating funds for other purposes will cause the budget to be breached and disrupt priorities."

Zilberfarb noted that the many demands being made by MKs for changes in the Arrangements Law and the state budget risk serious damage to the budget’s goals. "In such a situation, I may have to recommend before Prime Minister and Finance Minister Benjamin Netanyahu to consider continuing to manage the country’s economy in the next six months on the basis of the 1998 budget."

He stated that this should be an undesirable situation because structural reforms included in the 1999 budget proposal would not then be implemented and long-term investment plans for economic growth could not be carried out. "On the other hand, such a situation would be preferable to an unsupervised opening of the taps, whose price will have to be paid by each and every one of us after the elections. It is preferable to budgetary abandonment that could cause economic shocks and serious damage to trust in the economy and its international rating." He hoped that, "In the end, MKs will show responsibility, rise above these and other considerations and pass the budget and Arrangements Law."

Zilberfarb referred to laws raised in the Knesset without any consideration being given to the ability of the economy and budget to sustain them. "The greatest threat to the budget comes not only from coalition factions demanding additional funds for themselves, but especially from the consequences of populistic legislation raging in the Knesset that ignores the need to vote for necessary sources of funding to finance the additional expenditures resulting from the proposed bills."

According to Zilberfarb, breaching the budget will cause one of two possibilities (or a combination of them), "The bill for what happens today will be submitted to the public by the victorious coalition the day after the election, and we may find ourselves paying for it for a long time to come. Alternatively, one of the first tasks of any elected government will be to cancel the expensive laws passed now and the economy will pay an unnecessary price for the changes in policy."