• Fri. Apr 19th, 2024

Financial Commission to Review Excessive Deficit Urgently Following Adoption of Budget

BySamantha Johnson

Mar 17, 2024
Financial Commission to Review Excessive Deficit Urgently Following Adoption of Budget

On Wednesday, March 13, the ruling coalition approved a new version of the state budget for 2024, after a three-week delay. This new version took into account the impact of the war on the economy and canceled the technical sequestration that was previously in place. However, the Knesset Finance Committee will need to urgently address the issue of the state budget deficit next week. The deficit ceiling for 2024 has been set at 6.6% of GDP in the amendment adopted with the state budget, but the deficit is already at 5.6% and is estimated to reach 7-8% by the end of the year.

Despite the approval of the state budget, there is an ongoing disagreement over the transfer of 590 million shekels to private networks of ultra-Orthodox schools for the Ofek Hadash reform. The ministries of finance, education, and justice are blocking the transfer of this money, insisting that it be paid directly to teachers rather than to the NPO that runs the school networks. Private networks are also required to undergo stricter financial audits and demonstrate their educational performance.

This disagreement was a major reason for the three-week delay in approving the state budget. When it became clear that the approval could not be further postponed, the chairman of the financial commission, Moshe Gafni (Yaadut HaTorah), stopped blocking the vote, but also blocked additional measures accompanying the budget aimed at reducing the deficit in the coming years. These measures included abolition of tax exemptions for certain purchases, introduction of a carbon tax, a fee increase for car licenses, and mandatory reporting on apartment rentals.

Moody’s report announcing a reduction in Israel’s credit rating but maintaining a negative outlook praised these accompanying measures, but expressed doubts about the government’s ability to implement them in the current political climate.

By Samantha Johnson

As a content writer at newszkz.com, I delve into the realms of storytelling, blending words to paint vivid narratives that captivate and inform our readers. With a keen eye for detail and a passion for research, I craft compelling articles that resonate with our audience. My love for words drives me to explore diverse topics, ensuring that each piece I create not only educates but also entertains. Join me on this journey as we navigate the ever-evolving landscapes of news and knowledge together.

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