Knesset passes first reading of revised 2024 budget

The Knesset plenum has passed the first reading of the main part of the revised 2024 budget bill. The budget was approved by 57 votes to 50 with Shas chairman Arye Deri protesting that his vote in favor was not recorded. Two ministers in the emergency cabinet – National Unity party chairman Benny Gantz and Gideon Sa’ar voted against the budget.

The Knesset plenum was also due approve the revised fiscal deficit and capping spending in the budget, after which the budget will be discussed by the Finance Committee chaired by MK Moshe Gafni (United Torah Judaism) in preparation for its second and third readings.

The revised 2024 state budget totals NIS 584 billion – NIS 72 billion higher than the budget originally approved last year before the war. The fiscal deficit will be a relatively high 6.6%. The revised budget includes an extra NIS 55 billion in defense spending and NIS 31 billion that is expected to arrive as part of the US aid package.

Sources in the Ministry of Finance believe that the final budget might not pass three Knesset readings by February 19, in which case a huge across-the-board NIS 67 billion budget cut will be imposed until the budget is eventually passed.

Violation of a Basic Law and transferring political funds

The revised budget has been delayed and was not tabled in the Knesset until 16 days after the deadline, violating the Basic Law for the State Economy. The delay was caused by the Haredi parties demanding the exclusion of the yeshiva budgets from the across-the-board 5% cut, which applies to all ministry budgets. Minister of Finance Bezalel Smotrich fully agreed to this demand.

In addition, Haredi MKs led by Gafni sought to embed the coalition funds within the main basic budget. Ultimately a compromise was agreed on, in which these political funds will not enter the basic budget, but the regular supervision mechanisms for coalition funds will be removed. The implementation of the compromise required a long time, which resulted in delays in the budget approval process.

Published by Globes, Israel business news – en.globes.co.il – on February 8, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.