If the 2025 budget is not passed into law this year, it will create a very difficult situation, and the effects of the failure to pass this budget are already being felt, a senior treasury official told The Jerusalem Post on Tuesday.
Because the 2025 budget has not yet been passed, the government is currently forced to operate with a “continuing budget,” which is around NIS 100 billion less than the 2025 budget proposal.
“Imagine that you have a car going at a rate of NIS 620b. a year, and you need to stop it at NIS 520b. – it’s a brake-squealing moment for the government,” the official explained.
“If the state budget does not pass this year, it will be a very hard year – bordering on impossible, and some solution will need to be found,” he said.
“It is already starting to harm the activity of the ministries,” he added, offering as an example stalled transportation and Innovation Authority projects and even an impact on IDF spending.
The impacts are still moderate, but if they become more serious, it will slow government processes that will, in turn, slow the entire economy, he explained.
North and South plans
Another aspect of the situation is that rehabilitation plans for the North and South are also stalled. There are restrictions on how the continuing budget can be used – including that it can only be used for things that have existed in previous years.
“This is still moderate and not yet significantly felt, but when they want to make more decisions about grants and compensation for returning, all kinds of things about the North and South – things that didn’t exist in the past – it will be a problem getting budgets,” he explained.
“If the budget doesn’t pass at all, it will be even more of a problem because the government will turn into a transitional government,” he cautioned.
The continuing budget does have the advantage of slowing expenditure, which moderates the deficit, the official highlighted, but this comes with uncertainty and limits on the government to plan and act, he said.
This continuing budget is exceptional in how big the gap between it and the 2025 budget proposal is, he highlighted, explaining that this gap is normally around NIS 15b. to NIS 20b., rather than this year’s nearly NIS 100b.