Deficit Speculation Causing 'Great Harm' to Israel's Economy, Treasury Official Says

Rony Hizkiyahu, the Finance Ministry accountant general, decries the extent of the government budget deficit, but denies that there's tension in ministry over the issue

Israeli Finance Minister Moshe Kahlon and Prime Minister Benjamin Netanyahu speak in 2012.
Reuters

Rony Hizkiyahu, the Finance Ministry accountant general, warned on Monday that speculations about the overshooting of the 2018 government budget deficit were unfounded and were causing “great harm” to the Israeli economy.

He also denied reports that the swelling deficit was causing tensions between him and Shaul Meridor, the head of the treasury’s budget division. Hizkiyahu was speaking at an accountants general conference where Meridor also appeared, as did Finance Minister Moshe Kahlon.

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Kahlon and Hizkiyahu have both come under fire since the treasury reported that the budget deficit in the 12 months through October had risen to 3.9% of gross domestic product, putting it on track to exceed the target of 2.9%. It also showed a big drop in tax revenue in 2018.

“We’re in control of spending,” Hizkiyahu said. “We are the only ones who know the figures and we know for sure that they will converge on the level in the budget. There is no way that spending will be made outside the amended budget framework. Today everyone has become an expert on each one-tenth of a percent of the deficit, but you need to look at each figure from a multiyear perspective.”

Hizkiyahu termed the government’s success in reducing national debt to 60% of GDP “our security blanket,” adding, “What’s important isn’t whether we enter into next year with a deficit of 2.95% or 3.05% but rather at what level of debt — and we are going in at a level that will make it possible to cope with hard times.”

Kahlon attacked his deficit critics without naming names, but observers said he was speaking about Hizkiyahu’s predecessor, Michal Abadi-Boiangiu. “Even after a term of five years, they remain accountants general,” he said.