Israeli Finance Minister Bezalel Smotrich has asked the ministry’s budget commissioner to align with his economic policy, particularly regarding compensation expenses for displaced people in the north, or else he must step down, according to the Israeli economic newspaper Globes.
According to the newspaper, Smotrich wrote a letter to Budget Commissioner Yogev Gradus, which included: “As long as you do not identify with my economic policy and believe that you are having difficulty implementing it, you are welcome to step down. As long as you are in your position, you are subordinate to me and will follow my policies and instructions.”
off budget
The clash comes after Smotrich demanded that Gradus organize an “off-budget item” to fund compensation for displaced people from the north (on the Hezbollah front), while Gradus insists that the 2024 budget has already been passed, and to make retroactive changes, other budget items must be cut.
“There have been disagreements between the minister and the commissioner many times before, and there is no problem here,” Globes quoted Uri Yogev, who was budget commissioner between 2002 and 2004 when Benjamin Netanyahu was finance minister, and who has also held other senior positions in the public sector and is now a businessman, as saying. “The one who ultimately decides is the minister, and his job is to reflect the professional truth and present professional alternatives, to the cabinet and the public. He is responsible. This is the delicate balance here.”
The newspaper also quoted Udi Nissan, who was budget commissioner between 2009 and 2011 under Finance Minister Yuval Steinitz, and who today works as an economics lecturer at the Hebrew University in occupied Jerusalem, as saying: “There are internal procedures for managing disagreements. It happens that the minister thinks one way, and the commissioner thinks another way… but it is more legitimate to implement the policy dictated by the minister, and if the commissioner believes that it is a big mistake, he can always resign.”
However, both Yogev and Nissan agree that while the disagreements are legitimate and the minister should decide, this is a different story. “We are in a completely different situation,” says Nissan. “The minister is not doing the right thing. The last discussions on the 2025 budget were in June. The law dictates a legal and orderly process that allows the budget to be passed by the end of the year. But he avoided that for two months, disappeared, and did not do his legal duty. There were no procedures and no statements on the 2025 budget, that’s the background.”
Procedural controversy
According to the newspaper, the problem lies not only in the Finance Minister’s delay in preparing the budget, but also in the type of demands he makes of ministry officials, according to Yogev, who said: “When you read the public speeches, you can see that the head of the Budget Department often stands at the gate and warns. What Smotrich wants is for officials to do what the minister says, including appeasing the public. After all, if the minister decides that he wants to increase the state budget for 2024 at the expense of the deficit – let the Budget Department prepare it, and the Knesset will hold three readings. But it is illegal and immoral to demand that the Budget Department do things, while hiding them from the public.”
The newspaper quoted Shmuel Slavin, who served as director general of the Finance Ministry and the Welfare Ministry, as saying: “Most of the Finance Ministry’s leadership today is in opposition to the minister. The entire ministry is not working well, and it is very difficult to work like this. If there is a minister who the officials do not like, they do not take his opinion into account. The current minister, although he is not a professional, is a smart man.”
“The Budget Department has a bag of recommendations that it pulls out of a drawer, and as soon as Smotrich is not ready for them, it takes away a great deal of freedom of action from the department,” Slavin adds. “Even in the Prime Minister’s Office, Prof. Simhon (Netanyahu’s economic adviser) sees unprofessional people in the Budget Department. There is a problematic mix between Smotrich and the Prime Minister’s Office against the Finance Ministry leadership, and it is a complicated story. In his opinion, if there is no fundamental agreement, the most natural thing to do is to resign. But don’t worry, he will not resign.”
According to the newspaper, Yogev insists that “the position of the budget commissioner is also, according to the law, that of a gatekeeper, protecting the public from political pressure. His role, among other things, is to be able to withstand such pressure and not resign.”
