"Israel succeeded in overcoming the global economic crisis because of the biennial budget. I think that it played a key role in stabilizing the economy, improving performance, and improving the transmission from planning to execution of government policy," Minister of Finance Yuval Steinitz told the IMF newsletter yesterday. The newsletter is covering the IMF Annual Meeting now underway in Tokyo.
Steinitz added, "In 10 or 15 years, most Western countries, and even non-Western countries such as China, will adopt the biennial budget method, and recycle the budget every 24 months."
At the last minute, Steinitz decided not to attend the IMF Annual Meeting. The official reason cited by his aides was the need to prepare the budget. However, since it is already clear that Prime Minister Benjamin Netanyahu will call early elections there will be no need to submit the 2013 budget to the Knesset.
Steinitz presents the biennial budget as his key innovation as finance minister, even though it is a dismal failure. After Netanyahu set up the Trajtenberg Committee for social change and the cabinet adopted its recommendations, which include far-reaching changes on both the revenues (taxes) and spending (budget) side, early this year, they in effect became an alternative budget.
The biennial budget suffered another grievous blow in August, when the cabinet approved an austerity budget, which includes an unprecedented NIS 14 billion in tax hikes, in an effort to deal with the budget blowout.
Published by Globes [online], Israel business news - www.globes-online.com - on October 11, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012