It is almost two decades since Bibi Netanyahu was appointed as Israel’s Minister of Finance. Friend and foe acknowledge that he set the tone for a period of unparalleled growth in the economy. In 2022, “The Economist” of London credits Israel with ranking fourth amongst the best performing economies.

So what next? What will happen in 2023, as Netanyahu seems very likely to form his 6th government in the next few days?

Officially, the economy is still expected to grow, but at a much lower rate. The likely outcome is under 3%. Given post covid fall out, Ukraine and other international global shocks in the financial markets, this can be considered reasonably positive. However, Netanyahu bears little direct responsibility for the achievement.

What is at his disposal is a very hefty budget surplus. Large parts of these monies had been designated to help the self-employed recover from the covid period. For political reasons, Netanyahu’s party along with its allies blocked the legislation.

Meanwhile, as the Prime Minister Designate crawls towards announcing his cabinet teams, every day seems to come with a new announcement. A new sub-ministry or large department will be created to meet yet another demand from yet another so-called coalition partner.

I have lost track of all the changes. For example, there will be a whole new section if the Ministry of Defense. The religious academies (Yeshivot) will have their budget doubled. Several new justices will be appointed to the Supreme Court.

And so the list goes on.

From what I can tell, none of these handouts will result in an increase in productivity. Nor are they likely to generate any wealth for the country.

I recall a news item from about five years back, A respected economics team had calculated that the financing for each new department with a ministerial staff was around 10 million shekels per month – say about US$2.8 million a months.

If there are 5 such new offices, that is about an extra US$176 million in taxpayers money annually. And that is before any handouts for housing in the ultra-orthodox communities or building religious institutions or…………….

I cannot believe that the international financial markets will remain placid for too long. Israel still needs to raise money to sustain its economic growth. Israel’s credit rating remains high…..for now!

And as for the self-employed? You remember – those people who work for a living and generate wealth.

They were unofficially represented in the previous Parliament by Amichai Shikli. He changed allegiances earlier in 2022, moving over towards Netanyahu’s Likud party. This was one of the primary reasons for the fall of the previous government and the onset of a general election campaign, which Netanyahu won.

As Netanyahu has been handing off his coalition partners, doling out large sums to shut them up, Shikli appears to have lost his voice. There again, his salary is now guaranteed for the next few years!

Can Israel afford these additional and rising non-functioning payments over four years?

Perhaps the more pertinent question is why Netanyahu – who clearly knows better from the point of view of running an effective economy – finds himself forced to be totally imprudent with his fiscal policies?