The most salient aspect of the newly proposed national budget can be summarized with two numbers: NIS 60 billion ($18 billion) and NIS 55 billion ($16 billion). The former is the education budget; the latter is the defense budget. However, as previous budget debates have taught us, much like airport flight schedules, every number comes with a "not-final" asterisk.
For now, Defense Minister Avigdor Lieberman has conceded a NIS 4.8 billion ($1.4 billion) increase and in exchange received a series of other demands mostly pertaining to allotments for the elderly, but according to the understandings reached ahead of the second and third hearings in the Knesset, likely to be held near the Passover holiday, the issue will be reopened for discussion along with the possibility of receiving additional billions for the defense budget.
The increased funds for the education budget, among other things, will be allotted to decreasing school vacation days. The remaining changes, however, along with the massive increase of NIS 2.5 billion ($740 million) to the budget, will not go toward remodeling the existing structure of the overall education system, which has thus far failed to justify the public's considerable investment in it. In 2008, just a decade ago, the nominal education budget stood at NIS 28 billion ($8.3 billion). The present budget is more than double that amount, but the system has failed to demonstrate improved student performance. It's clear that when the system is problematic additional funds don't necessarily provide the solutions.
Education Minister Naftali Bennett, a self-described free-market proponent, also hasn't dared to implement any real reforms – such as the school voucher method; organizational restructuring to give school principals more authority; or cutting the ministry's administrative costs and improving the quality of manpower in the schools themselves. Increasing the budget does not guarantee greater success for the minister, which the past decade has taught us.
And if you are wondering about the government's newfound motivation to expedite the 2019 budget discussions so significantly, look no further than the expenditure restrictions implemented by Prime Minister Benjamin Netanyahu in 2013: The most brilliant fiscal move since the birth of the state. The "numerator law" capped spending and essentially handcuffed the entire government, preventing it from going into overdraft. Now, for Finance Minister Moshe Kahlon to implement his own plans, he has to create a new budgetary framework. Netanyahu has widely benefited from this move: The coalition is already pushing for a new budget and he has provided himself a modicum of immunity, which at the very least has mitigated the political pressure on him to approve budget deviations.
Bank of Israel Governor Dr. Karnit Flug has criticized the move, which will purportedly determine the budget on too long-term a basis. Essentially, however, this has been the exact case in recent years with biennial budget approval. Despite the criticism, this method has proved conducive to the government's stability, a more certain market and the various ministries' abilities to devise work plans.
