Civil Society Team’s position on the 2024 budget law
To address the budget deficit crisis: Expanding the scope of spending cuts and addressing core issues in the budget, such as the wage bill, medical transfers, and net lending
Ramallah - The Civil Society Team for Enhancing Public Budget Transparency issued a position paper on the budget law for the year 2024, in which it affirmed its reserved position regarding the President's issuance of the decree law on the general budget for the fiscal year 2024, on 7/22/2024. The law was submitted by the Cabinet 7 months after the fiscal year, and after the end of the extension period for the 2023 budget at the end of July, in exception to what is contained in the Public Budget Organization Law No. (7) of 1998. This represents constitutional violations and a breach of the legislation governing the preparation and approval of the general budget, as the draft budget was not presented and discussed with civil society, contrary to the provisions of the law.
The paper included budget estimates for the year 2024 amounting to 19.4 billion shekels, a decrease of 7.6% from the estimated budget for 2023. Current and capital expenditures (salaries and wages, operating expenses, transfer expenditures, net lending, and other expenditures including capital expenditures, fuel subsidies, interest, and allocated payments) were estimated at 17. 8 billion shekels, in addition to development expenditures, which were estimated at 1.5 billion shekels, or 8% of total expenditures, and 165 million shekels higher than the actual budget for 2023. Development expenditures will be financed by 968 million shekels from the public treasury, while 545 million shekels will be financed from grants and foreign aid. Revenues in the budget were estimated at NIS 13.9 billion.
The paper presented an analysis of the decrease in projected revenue and budget deficit for the year 2024. It also tackled public debt and statements of financial obligations of the government including public debt and arrears. It also referred to the pension fund and other financial obligations incurred by the government in favor of funds and other commitments. The position paper also reviewed the projected budgets of the Ministries of Health, Education, Social Development and Security (Ministry of Interior and National Security).
In its paper, the civil society team stressed its reservations about the delay in approving the budget law without any constitutional justification and contrary to the provisions of the Public Budget Organization Law No. (7) of 1998, especially since emergency circumstances have become a characteristic of the Palestinian situation, especially the occupation's continued piracy of confiscated funds and the subsequent deterioration of the economic situation, considering that the preparation and approval of the budget before the participation of civil society representatives is contrary to the government's declared policy of following a participatory approach. The team believes that the dissolution of the Legislative Council, the failure to hold general elections, and the continued disregard for the provisions of the 1998 Law Organizing the Public Budget and Financial Affairs impede the success of plans to reform the management of public finances and weaken the chances of achieving its strategic goals. The team also noted that measures were taken by the government during the current year to reduce operational expenditures, and spending was controlled in some areas, including the complete cessation of the purchase of furniture and new vehicles, and controlling expenditures in the use of communication lines, travel expenses, and rents, but control in these areas is not sufficient to address the budget deficit crisis, and it is required to expand the scope of spending reduction and control, and address the core issues in the general budget, which drain the largest share of the budget, including the bill for salaries and quasi-salaries in the civil and security sectors, medical transfers, and net lending.
The Civil Society Team also believes that successive governments have not succeeded in reducing the wage bill and reducing the number of employees. On the contrary, the salary bill continues to rise steadily, which indicates that there are no effective mechanisms to address this matter. The reports issued by the civil team indicate that there is a state of chaos in the management of the public sector employee file, there are no clear and published figures, and there are many differences between the numbers of employees, which requires expediting the adoption of a new civil service law, which will address many of the gaps and issues in the public sector and contribute to improving the situation of public employees, and working on the early retirement law to rationalize the public administration.
Furthermore, the reduction of net lending requires an implementable plan to address the accumulated de3tbs of local authorities and distribution companies, which collect electricity and water fees on a prepayment basis. This is particularly important since the net lending reach record levels (NIS 912 million in only the first six months of 2024).
The civil society team has reservations about the means of reforming the health system, which did not include a reform of the health insurance system, by working to pass a comprehensive and compulsory health insurance law. The team views this step essential for reforming the health system, and that any attempts to reform while maintaining the current health insurance system will not contribute to getting out of this dilemma.
The civil society team pointed out that the expected budget deficit needs international legal pressure campaigns to demand the Palestinian right to recover the funds frozen by the occupation, especially since they amounted to about 6 billion shekels, and to pressure the occupation to abide by the Paris Protocol and item (35), which emphasized that no amount may be deducted from the clearance revenues, except by providing invoices that are disclosed at the time of deduction, but the occupation ignores this item and continues to use the clearance funds as a punitive tool.
To learn more and see the numbers, you can download the full position paper here
