Treasury stops paying suppliers due to Knesset paralysis

Moshe Gafni

Power struggles between Knesset Finance Committee chairman MK Moshe Gafni and the Ministry of Finance are holding up budgetary transfers.

Israel's Ministry of Finance has been forced to halt payments to suppliers of the Ministry of Transport because of Knesset paralysis. In a joint appeal to Knesset Finance Committee chairman MK Moshe Gafni (United Torah Judaism), Ministry of Finance Account General Rony Hizkiyahu and Budget Director Shaul Meridor wrote, "Only recently, payments to suppliers of the Ministry of Transport who have carried out work for this ministry have been halted, because the ministry's budget has been exhausted, and budget queries addressed to the Finance Committee are left waiting on its table."

Hizkiyahu and Meridor state that because of the Knesset elections, the Finance Committee has conducted almost no hearings since the beginning of the year. Dozens of budgetary queries have been left hanging on the Finance Committee's table for months. "Despite the effort to avoid unnecessary damage to the functioning of the ministries and the services provided to people as much as possible, the lengthy period during which no discussions have been held by the Finance Committee has rendered essential adjustments in the approved state budget impossible. The result has been delays in payments to suppliers and failure to implement approved and planned policy measures."

The extraordinary appeal by Meridor and Hizkiyahu follows Gafni's refusal to hear the Ministry of Finance's request for approval of NIS 1.5 billion in budgetary transfers to the Ministry of Transport because the Ministry of Finance failed to submit the requests to him in advance.

Gafni threatening to delay billions in transfers and cuts

Gafni is threatening to delay approval of NIS 1.5 billion in budgetary transfers for transportation and NIS 2 billion in across-the-board cuts approved by the cabinet, as part of a power struggle with the Ministry of Finance. The requests were sent to Gafni today, and he commented on them at the beginning of a Finance Committee meeting.

With backing from the Finance Committee legal advisor Adv. Shagit Afik, Gafni argued that since a new Knesset had been elected, the Ministry of Finance should resubmit for the Finance Committee's approval all of the requests submitted to it during the preceding Knesset that the committee had not approved, so that the Finance Committee under his leadership could decide which of the requests should be heard. The Ministry of Finance says that there is no reasons to resubmit for approval requests that are no longer relevant.

At the outset of today Finance Committee meeting, Gafni attacked the Ministry of Finance, stating, "They are not bringing everything - they are bringing some of them. Had they brought everything there was and we had decided - we, and not they - what should and should not be approved, it would have been a different matter. Both veteran and new MKs should know that bringing or not bringing requests for approval is in the hands of the Ministry of Finance Budget Department. I ask them to submit everything that there was in the preceding Knesset. They want me to get angry and transfer nothing, so that they can save money."

In answer to a question from one of the Finance Committee members, Gafni said, "Neither you nor I are in charge here. The person ruling this country is a 23 year-old guy working in the Budget Department. He is running things. It is unbelievable. We are not in a democracy. He decides what to bring and what not to bring."

Ministry of Finance sources told "Globes" that Gafni's demand was unreasonable, because some of the demands submitted during the preceding Knesset's term were no longer relevant, and there was no logical reason to resubmit them now. The Ministry of Finance regards Gafni's demand as interference in professional matters pertaining to management of the state budget. Gafni says that Ministry of Finance director general Shai Babad supports his position, given the poor relations between Babad and Meridor.

One of the budgets that Gafni is delaying is a NIS 320 million transfer for the public transportation subsidy earmarked for recruitment and training of new drivers, among other things. The money being delayed by Gafni also includes payments that the Ministry of Finance is already months behind in paying.

In addition to budgetary transfers to the Ministry of Transport, the Finance Committee is also delaying approval of a 1.38% across-the-board cut decided by the cabinet on November 18, 2018. This NIS 1.15 billion cut is designed to pay for "absence of tenure" wage supplements for employees of the security services, additional building inspectors, a budget for the welfare fund of the Histadrut (General Federation of Labor in Israel), budgets for reinforcing civilian resilience in Sderot and communities near the border of the Gaza Strip, and extending the government's response to violence in the family.

Published by Globes, Israel business news - en.globes.co.il - on October 23, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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