2021 State Budget – When, How Much, and Why?

The state budget is the main tool through which the state determines the spending framework and priorities for government activity. Nonetheless, due to the ongoing political crisis, Israel's state budget has become a hostage of political struggles, and since the beginning of 2020 the state has been run using a pro-rated budget which is based on the 2019 budget; that budget was ratified by the Knesset in early 2018, under very different economic conditions than those of the present – when the economy is struggling with the impact of the COVID-19 pandemic which has afflicted Israel since March 2020, causing not only a health crisis but also the worst economic crisis in the history of Israel, with unprecedented unemployment rates.

The roundtable discussion held on November 8, 2020, looked at the importance of presenting a state budget, the damages inflicted on the economy by the absence of an approved budget, and the steps that should be taken at the present. The keynote speaker was Mr. Yarom Ariav, former Director General of the Israeli Ministry of Finance, who explained why it is possible and imperative to present the 2021 Budget by the end of 2020, how the budget would be structured, and why it is crucial for economic recovery. The first commenter was Prof. Zvi Eckstein, who referred in his comments to the main conclusions of the Aaron Institute policy paper titled "Macroeconomic Policy Outline for Recovering the Economy", which delineates the institute's position on the main discussion topic. Further comments were provided by Rony Hizkiyahu, Nadine Bodo-Trachtenberg, Eli Younes, Ori Yogev, Yael Mevorach, Aharon Fogel, Adi Brender, Ala Ghantous, Omer Moav who also moderated the discussion, and Shlomo Dovrat.

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