Mark your calendars: By August 25, Israel’s newly formed government has promised to pass the 2020-2021 state budget.
And what a budget it will be. Finance Ministry officials told the Knesset last week that the government is expected to lose some NIS 60 billion ($17 billion) in tax income for 2020 from the economic fallout of the coronavirus pandemic. That’s a loss in revenue larger than the entire cost of Israel’s military for the year.
It doesn’t help that 2019 ended with a NIS 52 billion budget deficit ($15 billion) to begin with.
The new budget must square the very complicated circle of an overspending government battered by an unexpected pandemic.
It isn’t just the government that’s suffering, of course. One estimate of the economic toll on ordinary Israelis has found that as many as 60,000 small businesses could be shuttered within a few months. The latest NIS 14 billion ($4 billion) rescue package for businesses and the legions of newly unemployed cleared the Knesset Finance Committee just last week.
Some industries have already begun to recover, while others — tourism, air travel, entertainment venues, event halls — will take many months to bounce back, if they do at all. Rescuing those vital industries is likely to cost billions more from the public coffers.
The state treasury, meanwhile, is in chaos. Finance Ministry officials openly concede they do not yet have accurate figures for the expected scale of the deficit. The ministry missed the legally mandated June 1 deadline for submitting its annual report on the government’s obligations over the next three years, which are not permitted to exceed set deficit targets.
The coalition agreement signed between Likud and Blue and White stipulates that a state budget for 2020-2021 must be passed within 100 days of the swearing in of the new government. The swearing-in took place on May 17; the new budget should be passed by August 25.
But it’s already June 7, and the government openly admits it still doesn’t understand the scale of the economic damage wrought by the virus, nor, with a balance sheet made up of distressingly fuzzy numbers, how it might construct an austerity budget that cuts billions in spending while simultaneously minimizing the long-term economic effects of the crisis and helping hundreds of thousands of Israelis ravaged by the downturn get back on their feet.
It is troubling, then, that the complex project of piecing together the country’s system-wide response to the economic crisis — in the form of a roughly NIS 400 billion ($115 billion) budget bill, perhaps the most significant budget bill in decades — is going ahead with an unprecedented lack of public input.
The same virus that drove the budget crisis also closed the Knesset off to advocacy groups, journalists, lobbyists, NGOs, industry representatives, diplomats and outside experts who usually play pivotal roles in the development of legislation, including and especially the state budget bill. On a regular day in more ordinary times, they can number in the thousands of visitors per day to the Knesset building.
The Knesset closed itself to outsiders as part of its coronavirus safety measures. Only employees, MKs and a limited number of aides are allowed into the building. Government officials arrive on occasion to give testimony in committee, though only a handful are let in at a time.
And that means drastically reduced access to the parliament and its vital committees for advocates, interested parties and public representatives.
Not all committee meetings are broadcast through the Knesset’s website or television channel. Even for meetings that are broadcast, the only way for outside parties to take part in the debates and be heard by MKs is to obtain the committee’s permission to join the discussion via a special Zoom video-conference link. Such links are jealously guarded by committee staffers and have proven extremely hard to obtain.
And none of that is likely to change soon. On Sunday, the Knesset publicized new restrictions. MKs are now limited to two aides each, and those without immediate committee or plenum business are asked not to show up at all amid growing fears that the virus may be poised for a new wave of infections.
The Knesset is to remain mostly closed at least until mid-June, Knesset officials have said off the record. At that point, in the optimistic scenario that the pandemic does not return in force, some visitors will be allowed into the building on a very limited basis — mostly as guests of MKs, with a limit of two or three guests per MK.
Everyone else — reporters, lobbyists, public advocates and NGOs – still won’t be allowed in. Meanwhile, no effort is underway to make the debates, discussions and lawmakers more accessible to those outside advocates as the budget discussions get underway.
There is cautious optimism that the parliament may begin to cautiously reopen to the public sometime in July, barring delays from a new outbreak or careless lawmakers. But many of the critical decisions behind the new budget bill may well be decided by then.
Follow the money
It is hard to exaggerate the importance of the next few weeks for the economic well-being of millions of Israelis. The next budget will be concerned with cutting spending to avoid a runaway deficit and piecing together a stimulus package to help put the economy back on its feet. Both budget cuts and stimulus funds are exercises in prioritization, and the largest versions of each seen in many years are now in the works with almost no input from beyond the narrow confines of the Finance Ministry and a handful of lobbying firms.
One example: A fierce debate is underway in the Knesset over who should get the billions being handed out each month to keep businesses afloat and incentivize them to rehire furloughed employees. Many large corporations have hired lobbyists to convince MKs and Finance Ministry officials that the stimulus should be given per rehired employee — a formula that heavily favors large companies. Outside advocacy groups and business journals are calling for a NIS 10 million ($3 million) cap per business to limit the bailout for large businesses and help spread the limited funds around to keep more small businesses alive. The argument will decide the fate of thousands of businesses and families, but is almost entirely invisible to those who will be affected by the decision.
It isn’t just about money, of course. Social issues are being addressed without the affected constituencies present in the room. For example, the Knesset is set to consider ways to fight the scourge of violence against women, but few women’s groups will be able to make their voices heard at those deliberations.
For the public, watchdog groups, NGOs and advocates of all stripes, nothing can replace unimpeded access to the Knesset. The Knesset is by far the most transparent part of Israel’s sprawling government apparatus. Meetings in government ministries are neither filmed nor broadcast. Only in the Knesset is the influence of competing interests made visible, only in its committee debates — assuming they are broadcast and journalists can attend — do lawmakers, treasury officials, commercial lobbyists, unions, trade organizations and watchdog NGOs square off in real time to lay their case before the broader public.
It won’t be the Finance Ministry or the professional lobbyists who are hurt by the virus-built wall that now keeps their work largely hidden from the public. Lobbyists must wear orange tags in the Knesset; there is no such requirement in any other government building where they often have free rein.
It is only those groups that rely on public visibility for influence, the watchdogs and concerned citizens, who have been effectively silenced by the virus restrictions.
No one has suggested a conspiracy on anyone’s part to exclude the public from the budget debates, only a kind of inertia. It is easier to blame the virus than to quickly expand the broadcast infrastructure; easier to be stingy with Zoom links than to let meetings drag on as they once did, when everyone had their say.
The result is a strange and worrying disconnect. Israelis can now go out to restaurants and bars, visit beaches and pools, but are still weeks and even months away from being able to visit their parliament to advocate for their views and interests.
The Knesset is hard at work piecing together the most economically significant budget law in recent history in proceedings that, for the first time, will be mostly hidden from the public eye.
Header: Prime Minister Benjamin Netanyahu, center, arrives for a Likud faction meeting at the Knesset, May 25, 2020. (Flash90)
Original: Haviv Rettig Gur – TOI