Passing the Budget and the Dispersal of the Knesset

To date, the Knesset was dissolved only once due to failure to pass a budget. On December 23, 2020: the 23rd Knesset was dissolved after it did not approve the budget. Originally, the law mandated that the government approve the budget by August 2020, but as part of what was termed the "Hauser compromise" the law was amended, and the date was postponed to December of that year.

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To date, the Knesset was dissolved only once due to failure to pass a budget. On December 23, 2020: the 23rd Knesset was dissolved after it did not approve the budget. Originally, the law mandated that the Knesset approve the budget by August 2020, but as part of what was termed the "Hauser compromise" the law was amended, and the date was postponed to December of that year.

In two additional cases, failure to pass a budget indirectly affected early elections. Disagreements among the coalition partners over the 2003 budget contributed to the dispersal of the 15th Knesset leading to both Gesher and Labor leaving the government. In 2013 then Prime Minister Benjamin Netanyahu blamed early elections and the dispersal of the 19th Knesset for "inability to pass a responsible budget."

Of the 23 Knessets that have ended their tenure so far:

• Only 6 Knessets did not have early election.

• Most of the Knessets (13) were dispersed following the approval of a special law to dissolve the Knesset. This, for example, is what lead to the dispersal of the first Knesset in 1951, as well as the 21st and 22nd.

• Two additional Knessets were dissolved by order of the Prime Minister: the 15th Knesset was dissolved in 2002, and the elections were scheduled for 2003. Also, the 16th Knesset was dissolved in 2005, and the elections were scheduled for 2006.

• The 17th Knesset was dissolved due to failure of Tzippi Livni to form a government after the resignation of Prime Minister Ehud Olmert in 2008, elections were then held in 2009.

• The 23rd Knesset was dissolved due to failure to pass the budget law.

Additional background:

The dissolution of the Knesset due to failure to pass the budget is a mechanism that was added when the direct election law was passed in the 1990s. This part of the law remained on the books even after the direct election was abolished in 2001.

Under current law, the Knesset is automatically dispersed if it has not approved the budget by the end of March. The date can be postponed in different circumstances. For example, in the case of the formation of a new government - the Knesset dissolves if the budget is not approved within 145 days of the formation of a new government (the number of days does not include Israeli holidays).