Knesset lawmakers okayed state budgets for 2023 and 2024 in the wee hours of Wednesday, ending months of coalition bickering over funding priorities that had threatened to upend Prime Minister Benjamin Netanyahu’s government.
After slogging through a seemingly unending roster of objections leveled by the opposition in hopes of delaying proceedings, MKs finally voted to approve the final parts of the two-year budget just after 6 a.m. Wednesday, capping a boisterous all-nighter in the plenum. Lawmakers voted 64-55 along coalition lines on the final two readings for the 2023 budget, the 2024 budget and for a bill setting funding policy.
With a May 29 deadline to pass a budget or call new elections looming, Netanyahu had scrambled in recent weeks to meet his coalition partners’ demands, only clinching some deals Monday to pave the way for the vote, which began late Tuesday.
The passage buy Netanyahu and his government another 18 months until the Knesset must approve another budget, clearing the coalition’s largest internal point of contention.
“This is a good budget, it will serve the citizens of Israel,” Finance Minister Bezalel Smotrich said from the Knesset podium after the vote, to cheers and applause from the coalition lawmakers who stood together in a show of unity to celebrate the milestone.
As the Knesset began voting on the budget, thousands of protesters gathered in Jerusalem, waving Israeli flags and chanting against the government “looting” the state coffers. Demonstrators similarly criticized the budget for funneling billions in grants to the ultra-Orthodox community, while allowing men in that community to avoid employment and military service.
Ahead of the legislative session, the premier sought to project stability to replace the bickering of the past several weeks, thanking his coalition partners for coming together to support the nearly NIS 998 billion ($270 billion) budget, which includes billions in funding for sectoral interests.
“This government will last all four of its years,” he said.
However, the budget process again highlighted fault lines within the hardline government, with parts of three parties publicly pulling their support for the budget unless handed additional funding allocations. Two of the three issues were resolved Monday.
Critics have accused Netanyahu of going too far to appease ultra-Orthodox parties, at the expense of the general public, with the country battling inflation and a high cost of living.
“This government is terrible for the economy. It said it would reduce cost of living, there’s nothing connected to cost of living in this budget. There is no reform to reduce cost of living,” opposition leader Yair Lapid said.
“This budget is reckless, it’s a disaster for the Israeli economy and for Israeli society, and it violates the social contract with the State of Israel that we, our children, and our children’s children will pay for,” he charged.
The budget allocates at least NIS 5.9 billion ($1.6 billion) in discretionary funding to satisfy political promises to ultra-Orthodox parties, including grants to yeshiva students, unregulated religious schools that do not teach core subjects like math and science, and funding a food stamp program that is not tied to working and criticized as tailored to disproportionately benefit the ultra-Orthodox community.
Netanyahu and Finance Minister Bezalel Smotrich also agreed to fund expanded stipends to yeshiva students to the tune of up to NIS 250 million ($68 million), using any surplus funds left over from ultra-Orthodox schools. This deal, which quelled rebellion among a subsection of ultra-Orthodox politicians, also included authorization to retroactively pay yeshiva students a grant, as if the funding applied from the beginning of 2023.
Smotrich said the budget will “provide stability and certainty to the economy.” He did not note warnings from credit agencies that Israel’s ability to borrow could be affected by the judicial overhaul being pursued by the government.
While glossing over internal pressure, Smotrich said that the budget survived “enormous pressure from interested parties, irresponsible strikes and media campaigns,” but the government “did not capitulate.”
Netanyahu and Smotrich secured the last of the votes needed to pass the state budget Monday by promising far-right party Otzma Yehudit to funnel up to NIS 250 million ($68 million) into a party-held ministry that supports development in the Negev and the Galilee regions.
The deals allowed them to stay just below the mandatory trillion-shekel budget ceiling, which would have risked extending the process by requiring a return to Knesset committees to approve the changes.
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