חוק הפחתת הגירעון והגבלת ההוצאה התקציבית (תיקון מס' 14), התשע"ד-2014Law for Reduction of Deficit and Limitation of Budget Expenditure (Amendment No. 14), 2014 · automatic translation · suggest a correction

What the sponsors propose

The bill seeks to change the government expenditure limitation rule and to establish that, starting from the state budget for 2015 onward, the limit on the growth of government expenditure will be set at the average population growth rate in Israel over the three years preceding the laying of the budget law, plus one percent multiplied by the ratio between 50% and the latest known debt-to-GDP ratio. According to the sponsors, the existing rule is expected to lead in the coming years to expenditure growth rates significantly higher than in the past, due to a mismatch between its components and the expected state of the economy, particularly due to changes in demographic development. According to the sponsors, this could harm the credibility of fiscal policy and lead to adjustments on the revenue side that would endanger continued growth. According to the sponsors, basing the limitation on population growth is intended to ensure that the real per capita expenditure level does not decrease, and the addition is intended to increase it in accordance with progress toward reducing the debt-to-GDP ratio, which has been set at a target of 50% for the medium-to-long term.

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An automatic summary of the explanatory notes written by the bill's sponsors. These are their arguments, not an official Knesset summary. · The bill on the Knesset website

What was said in the plenum

The law changes the formula for the rule limiting the growth of government budget expenditure, so that instead of being based on the average economic growth of the last 10 years, it will be based on demographic population growth combined with a desired debt-to-GDP ratio, leading to a lower growth rate (about 2.6% instead of about 4%) for the 2015 budget. The debate centers on whether this is a responsible step needed to prevent tax increases and maintain fiscal stability, or a hidden cut in social services that will harm citizens without sufficient economic justification.

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An automatic summary of the plenum transcripts: the debate on the bill at every reading it was voted on. Arguments are given as the speakers made them; this is not an assessment. The list of speakers comes from the transcript, without a model. Transcripts of the sittings: 1, 2

Reservations to the second reading

4 reservations were filed: proposed changes to the text the committee brought to the second and third reading.

The reservations sought to change the method of calculating the maximum permitted addition rate in government expenditure, including the basis for its calculation and the reference period, and to amend the conditions limiting civilian public expenditure.

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By faction

• Labor opposition · 4 reservations · 15 members
• Hadash opposition · 4 reservations · 4 members
• United Torah Judaism opposition · 4 reservations · 7 members
• Meretz opposition · 4 reservations · 6 members
• Ra'am–Ta'al opposition · 4 reservations · 4 members
• Shas opposition · 4 reservations · 10 members
• Balad opposition · 1 reservation · 2 members

A joint reservation counts for every faction whose members filed it. 2 proposers were not matched to a member: listed under the groups, not counted by faction.

Asked to speak: Gila Gamliel (Likud Yisrael Beytenu)

Proposers and reservation numbers are extracted automatically from the committee version, and the count is checked against the numbers printed in it. The descriptions are an automatic summary. Committee version for the second and third reading (PDF)