Critical Audit of Economic Cabinet’s Performance during Recent Conflict
Introduction
A harsh report released by the State Comptroller highlights significant shortcomings in the functioning of the economic cabinet during the recent conflict in Israel. Established under Prime Minister Benjamin Netanyahu, the cabinet was intended to address social and economic issues amid the war, yet it soon became ineffective.
Background on the Economic Cabinet
Two years ago, Prime Minister Netanyahu revitalized the dormant economic cabinet, appointing Finance Minister Bezalel Smotrich as its head while he focused on security matters. This cabinet was tasked with overseeing civilian aspects related to the war’s management. However, a recent audit reveals that despite an initial allocation of 30 billion shekels on paper, the cabinet’s actual operational capabilities dwindled to virtually nothing.
Initial Efforts and Subsequent Decline
Initially, the cabinet met five times in the first two months of the conflict, making a handful of decisions, including the establishment of a Recovery Management Authority and tax breaks for residents of evacuated communities. However, after these early sessions, the cabinet fell into inactivity, failing to convene for more than a year, with no meetings scheduled until the end of December 2024. The report underscores the critical need for consistent discussions within the cabinet to fulfill its role effectively during such crises.
Key Areas Neglected
The report identifies three specific areas under the cabinet’s purview that were not addressed:
- Economic Support for Businesses and Workers: There was no response to the growing economic distress among businesses and their employees during the conflict.
- Coordination of Civil Initiatives: The lack of coherent strategies to coordinate civilian efforts exacerbated ongoing challenges.
- Public Awareness Campaigns: There were no substantial outreach initiatives to inform the population about the developments and available support.
Additionally, the formation of a smaller, dedicated cabinet was never realized.
Failed Attempts at Establishment
The report discusses the unsuccessful attempt to create a civilian control center, assigned to Tal Bessaks, which was intended to serve as an executive arm of the economic cabinet. Established in November 2023, the center operated for only two and a half months before Bessaks resigned. During its brief existence, it reportedly faced significant challenges concerning its authority and operating relationships within the Ministry of Finance.
Accountability Deflection
In his response to the audit, Minister Smotrich shifted the responsibility for the cabinet’s failures to professionals within the Ministry of Finance, the Ministry of Juststart, and the Civil Servstart Commission, citing substantial difficulties faced during the establishment of the control center. He asserted that he lacked sufficient authority to initiate the center’s functions effectively. Conversely, professionals from the Ministry of Finance claimed they had assisted in its establishment, contesting Smotrich’s narrative.
Historical Context of Cabinet Ineffectiveness
The audit traces the decline of the cabinet’s effectiveness over the past two decades. From the period of government 30 (2003-2006) to government 37 (December 2022-October 2023), the average number of decisions made dropped by approximately 90% (from 52 to 5.1 annually). This decline included a troubling trend where decisions were often made without proper discussion.
Participation in Meetings
Participation rates among cabinet members have faltered significantly. In previous administrations, attendance tended to be higher, yet in the current cabinet’s only pre-war meeting, just 53% of members attended, with Prime Minister Netanyahu absent.
Unaddressed Issues
The report highlights several key issues that remained unresolved:
- Northern Border Settlements: The cabinet failed to provide a comprehensive response to the civil crisis affecting communities in the northern border regions, exacerbated by ongoing security threats.
- Labor Shortages: With approximately 310,000 foreign workers impacted by the conflict, there was no coordinated effort by the cabinet to address labor shortages in critical sectors, particularly construction and agriculture.
- Business Aid Programs: Although the cabinet was granted the responsibility to discuss economic assistance programs for businesses, it failed to hold any discussions or make decisions on this matter.
Government Decisions Outside the Cabinet
Despite the cabinet’s inaction, the broader government took steps to address some issues, enacting 24 decisions related to the cabinet’s remit within six months of the conflict. Budgetary allocations totaling 11.8 billion shekels were also directed toward civilian needs arising from the war. However, the audit emphasizes that these actions did not substitute for the comprehensive governmental oversight expected from the cabinet.
Conclusion
State Comptroller Matanyahu Englman has criticized Finance Minister Bezalel Smotrich’s inability to exercise his powers effectively within the cabinet. He remarked on Netanyahu’s lack of intervention when the cabinet ceased to convene, indicating a failure to ensure thorough government engagement in addressing civilian needs during the ongoing conflict.
This audit raises serious questions about the management and responsiveness of the Israeli government during periods of crisis, underscoring the necessity for effective governance and accountability in war times.