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Israel’s budgetary transfer farce must be stopped

"The Supreme Court has instructed the Ministry of Finance to explain its requests for budgetary revisions issued to the Knesset’s Finance Committee, following Knesset member Shaffir's request for an interim order.”

by Dora Nazarian Kadisha

June 24, 2014 | 5:00 pm

<em>Photo by Grauesel/Wikipedia</em>

Photo by Grauesel/Wikipedia

This headline should be read very slowly. Not because it's an especially long or complex phrase, but rather because it teaches us a whole lot about the huge problem that exists because of Israel’s lack of “separation of powers.”
 
The problem is the basic procedure of transferring budget funds.  Every year the national budget is approved by the government and the Knesset.  The budget indicates exactly how much money is allocated to each ministry.  However, throughout the year, there are many changes that need to be put in the ministerial budget due to new policies and projects.  Currently, every transfer of money from one budget line to another (even a tiny one) is done by the Ministry of Finance, NOT the minister in charge.  This means that every little change must go through the Ministry of Finance, giving very little independence to the ministers.  To make matters worse, the Ministry of Finance forms all the budgetary shifts into a single "package," which is then forwarded to the members of the Knesset Finance Committee for approval.  This is required by law, but the committee members cannot perform their job when they are "bombarded" with hundreds of financial revisions all bundled up together with only minimal details and explanations – if any – and under unreasonable schedules.
 
In practice, the Knesset Finance Committee has gradually been transformed into a technical "rubber stamp" – incapable of fulfilling its designated role. Even worse, it has become an "approving station" and often a political wrestling ring, which pins budgetary shifts as hostages in struggles between opposing parties – struggles that are generally unrelated to the multitude of revisions and shifts on the Committee's table. Thus, instead of serving as an effective supervision tool – the Committee has become a stumbling block onto itself.
 
This dire situation has taken center stage during the past few months, mostly thanks to the vigorous work of Knesset member Stav Shaffir. As a member of the Finance Committee, Shaffir has been exposing more and more aspects of this defective process, which until now has been hidden from the public. Ironically, this struggle has succeeded in underlining the weakness of the legislative authority and exposing the entanglements that exist between various branches of government. In the absence of effective parliamentary tools, Shaffir had no other choice but to appeal to the Supreme Court to issue an interim order to stop budgetary transfers. And so – the Judicial Authority has also joined the game.
 
Knesset Finance Committee

Though this story may sound like a well-mixed Israeli salad, it exemplifies one of the main weaknesses of the Israeli government system.  The solution to the problem requires “reform” and a re-ratification and implementation of the “separation of powers.”  The farce of budgetary transfers can serve as a jumping board for reform, first and foremost by granting power to ministers to carry out changes within their own budgetary frameworks – without the intervention of the Ministry of Finance. This is their job and their authority, and this is why the public elected them in the first place. At the same time, the Knesset must adopt structured patterns for supervising the government's work, while ensuring that Knesset members receive extensive, accessible and relevant information from the ministries. This form of supervision is needed to ensure focus on government goals and accountability.


Dora Nazarian Kadisha is executive director of the Citizens' Empowerment Center in Israel (CECI). Founded in 2003, CECI is an apolitical, non-profit 501(c)(3) organization dedicated to paving the way for a more stable, effective government and electoral system through research and education.  CECI’s initiatives focus on education of democracy and leadership programs. These initiatives empower Israeli citizens with a better understanding of their democratic rights and obligations and encourage greater civic involvement in the communities for the future of the country. CECI's website ceci.org.il/eng.

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