Israel's Ministry of Finance introduced legislation to increase public spending by 30 billion shekels to fund the government's stimulus plan. This step was announced minutes before Shabat. On top of the budget boost for the various ministries, the MoF has proposed to reimburse Israel's social security, the Bituach Leumi, for 17.7 billion shekels spent on unemployment benefits, as unemployment rates surge to 24 percent.
The government will increase spending even though a budget for the fiscal year 2020 has yet to be passed in parliament. The legislation would allow the government to implement the stimulus package plan even though the current interim budget dictates that spending should not exceed 1/12 of the previous year's budget. The legislation would temporarily allow the government to exceed spending restrictions to tackle the COVID-19 crisis.
The commitment to reimburse Bituach Leumi comes as a relief to many in the institute who have criticized the MoF of refusing to cover the costs of increasing unemployment benefits. Even so, Bituach Leumi have estimated total costs of unemployment benefits at 20-38 billion shekels by the end of 2020. Some have even raised the possibility of a MoF plan to push for a sweeping cut in benefits after the COVID-19 crisis, under the pretext of rising deficits caused by high levels of unemployment.
