State comptroller pans government failure to prepare economy for war

The state comptroller has found that the government made insufficient preparations for future emergencies following the coronavirus pandemic, which would have made it easier to protect the Israeli economy during the war in Gaza, according to a scathing report released on Tuesday.

According to the comptroller’s office, the past two years of war will end up costing NIS 250 billion ($76 billion) by the end of 2025, with all Israelis “paying this enormous price, and future generations will pay it as well.”

In the two years prior to October 7, 2023, the government did not deal at all with the issue of economic emergency preparedness, the comptroller’s office found. Moreover, the Finance Ministry did not prepare any plans for an extended war lasting longer than a month, and “there was no emergency surplus in the state budget that would allow for immediate financing of military and civilian needs.”

The comptroller also found that the disbursement of war budgets in 2023 and 2024 was also “significantly delayed.”

In addition, the ministry did not create a “contingency plan that would allow for the rapid distribution of grants to affected populations” nor “finish mapping the needs of government ministries in times of emergency,” the comptroller found, calling on Prime Minister Benjamin Netanyahu to appoint a figure to develop a strategy for dealing with economic risks arising from emergencies such as wars, epidemics, and natural disasters.

The comptroller’s office stated that the government has struggled to address home front needs, including reconstruction in the north, and has failed to provide a comprehensive response to fundamental issues such as the labor shortage.

The office slammed Finance Minister Bezalel Smotrich for not convening the socioeconomic cabinet — the government’s forum for civilian and economic matters — during the peak of the war, from December 2023 until December 2024, which could have made decisions on important economic issues.

“Also, when the cabinet does make a decision, more and more the decisions are made without discussion. When there is no discussion, there is no in-depth discussion, no criticism and no opportunity to hear enough professional opinions. For two years, ministers have avoided coming to socioeconomic cabinet discussions, and on certain issues, no decisions have been made at all,” the office added.

In a video statement, State Comptroller Matanyahu Englman called out Netanyahu, Smotrich, as well as former finance minister Avigdor Liberman, for failing to address emergency preparedness.

Moreover, the government failed to adequately curtail coalition spending, with an audit revealing that despite a Finance Ministry decision in late 2023 to divert NIS 1.6 billion ($489.5 million) in coalition funds to war needs, only NIS 860 million ($262.9 million) ended up diverted.

The report on Tuesday was the sixth released as part of Englman’s broad probe — the only state-sanctioned comprehensive investigation into the October 7 attack, during which some 1,200 people were massacred and 251 taken hostage by Hamas and allied groups in southern Israel.

Netanyahu has long resisted forming a state commission of inquiry, claiming at first that one could only be formed after the war ends, and later that such a panel — appointed by the Supreme Court chief according to law — would be biased.