Israel Pulse

Why Israel's finance minister is rushing to approve 2019 budget

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Article Summary
Getting the 2019 budget approved would ensure Finance Minister Moshe Kahlon that he has funding to move ahead with his plans, even if Prime Minister Benjamin Netanyahu surprises everyone by advancing the election.

Israeli Finance Minister Moshe Kahlon was wearing a bright white shirt and a red tie as he sat down behind his desk Oct. 2 for a video chat with the public. Throughout the entire conversation, the Kulanu Party chairman attempted to relay the sense that he has been very busy lately. He made sure to show off his past achievements and to present his plans for the future. The questions submitted by the viewers came in as he was talking. It was obvious that someone behind the scenes was sorting through them carefully and picking only the ones that would help the finance minister sell his message to his audience.

In this way, Kahlon expressed a measure of reservation against recent decisions by the Supreme Court, including the decision to overturn the tax he wanted to introduce on people who own a third apartment — the flagship piece of legislation in his efforts to reduce housing costs. He also promised that he would resubmit his law to the Knesset in its winter session, which begins Oct. 23.

The last question was about Kahlon's plan to put together a budget for 2019 over the next few months. News of this was first reported by Channel 2 one day earlier, generating considerable buzz in the political arena. After all, proposing a budget this early is such a rare step that it immediately raised questions as to Kahlon's motivations. At the same time, it also had people asking how it would affect Prime Minister Benjamin Netanyahu and the future of his fourth government.

In his response, Kahlon confirmed that he may start working on the budget now, sayingt Israel needs a budget for 2019 in order to relay a sense of stability. "There doesn’t have to be some conspiracy or anything behind this," he said. "It is something that a finance minister does to signal that we have a stable economy with a bright future ahead of us."

This is, of course, an official and partial answer by someone who is preparing himself for the most extreme scenarios as a result of the criminal investigations into the prime minister's dealings, which could eventually lead to the sudden collapse of this government.

Kulanu’s chairman realizes that he needs more time so that he can present the public with significant achievements in the areas of housing and reducing the cost of living. Putting together the 2019 budget long before this would normally be done sends a message of stability to the economy and investors, but at the same time, it is also a sophisticated maneuver that will benefit Kahlon politically.

His greatest fear is a quick decision by Netanyahu to advance the next elections as the investigations proceed and the prime minister becomes more likely to face indictment. Should that happen, Netanyahu could claim that he is the victim of a political witch hunt. In fact, many consider this to be a reasonable scenario.

If that happens, Kahlon and other coalition partners who have no interest in going to the polls anytime soon could find themselves facing a snap election. Kahlon still suffers from the trauma of his big fight with Netanyahu in April over the prime minister's attempt to shut down the new Public Broadcasting Corporation, threatening to call early elections. Kahlon walked away from that limping and scarred and has been preparing himself for elections ever since. He operates on the assumption that Netanyahu is unpredictable, and that the prime minister could surprise everyone.

The early approval of the 2019 budget would ensure that Kahlon has billions of shekels at his disposal to implement his programs, particularly his "Net Family" one, even during an election year. This is a program intended to benefit young families by increasing their net earnings by hundreds of shekels per month. Furthermore, he also realizes that Netanyahu will give him almost anything he asks for over the next few months — while facing the police investigations. Given the relatively harmonious state of the coalition, it should be easy for him to pass a budget.

The result of Kahlon's maneuvering less than three weeks before the Knesset meets for its winter session is that it creates the sense that the coalition is stable. Since Netanyahu benefits from this, Kahlon could be said to have strengthened Netanyahu, at least publicly.

This has another advantage for Kahlon, too. He hopes that the new chairman of the Labor Party, his nemesis Avi Gabbay, will lose popularity over time. As one senior minister told Al-Monitor, the surprising election of Gabbay as head of the Labor Party in July ensured that Kahlon, who was once the weakest link in the coalition, is now its strongest one. Gabbay leads a social-oriented agenda from the opposition; Kahlon is considered the champion of the working class within the government.

Obviously, Netanyahu could announce an election whenever he wants. Nevertheless, senior members of the coalition believe that nothing dramatic will happen to Netanyahu on the legal front before April 2018. The investigations are still underway, and it will take time to decide whether to indict him. What this means is that there is no reason to break the coalition apart now. Therefore, Netanyahu will begin the Knesset's winter session as a strong prime minister with solid support from the public and a stable and functioning coalition, with no major crises on the immediate horizon. As long as the diplomatic process plods along in place, with no major decisions to set the prime minister on a collision course with HaBayit HaYehudi, Netanyahu's fourth government could continue to function despite the mountain of investigations he faces.

Netanyahu is benefiting from the fact that none of his coalition partners want elections anytime soon, and their aversion to another round of elections only gets stronger over time. Most of these partners are not particularly fond of Netanyahu in the best of circumstances, but their narrow political interests cause them to hold on to their seats in government as tightly as they can for as long as they can, and that means maintaining the integrity of the coalition.

The chairman of Shas, Interior Minister Aryeh Deri, is in a bad situation. His party is losing support, and he is entangled in criminal investigations of his own. In other words, the last thing he needs right now is an election. We have already seen how Kahlon needs more time. Defense Minister Avigdor Liberman, the chairman of Yisrael Beitenu, enjoys his job, so he also wants the government to remain in power. As for HaBayit HaYehudi, its leader Naftali Bennett wouldn't dare bring down a right-wing government. Even having Netanyahu in power is not a good enough reason for him to do that.

As far as the opposition is concerned, no good news will come out of the Knesset's winter session. They expected this to be the session in which Netanyahu falls, but that isn't happening — at least not yet.

What's worth noting is that this will be the first time that the head of the largest opposition party will not be serving as chairman of the opposition in the Knesset. Gabbay is not a Knesset member, so he will try to present an alternative to Netanyahu from outside the legislature. At the very least, that should be interesting.

Mazal Mualem is a columnist for Al-Monitor's Israel Pulse and formerly the senior political correspondent for Maariv and Haaretz. She also presents a weekly TV show covering social issues on the Knesset channel. On Twitter: @mazalm3

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