Smotrich unveils Israel's state budget, economic plan to fight inflation

Finance Minister Bezalel Smotrich on Tuesday presented Israel’s state budget and the economic plan for the next two years, following the former’s approval by the government on Friday. Topics highlighted by the minister were the struggle against inflation, security, education and housing costs.

Smotrich began his remarks by commenting on the state of inflation and the ministry’s intention to combat it, as well as a settlement on wage agreements.

"On Friday, the government passed a budget and regulations law. It was hard work. When we entered the process of building the budget, we saw the challenge of inflation, [and] the challenge of wage. We have been without a wage agreement in the public sector for four years,” he said.

“The greatest service to the citizens of Israel is to fight inflation and bring it below the target range. Another challenge is the coalition agreements from which the best elements for the economy must be selected. We managed to meet the target well, we did not breach the [pre-established] framework,” he added.

Smotrich announced that the subsidy for after-school daycares is to be extended, as well as the increase in credit points for parents of children aged 13-18, to NIS 2,800. “The aspiration is that [this will happen] this year. We want to be good to everyone and ease the cost of living. The daycare centers will not be more expensive for parents by one shekel, we will absorb the costs."

Security and defense matters

Speaking on the matters of security and defense, Smotrich noted that “The Israel Police and the Israel Defense Forces are receiving an increase that has not [been seen] since the establishment of the state. Policemen are being added, a national guard is being maintained, the reserve system is being increased. The same goes for the Shin Bet (Israel Security Agency) and the fire brigade.”

He also highlighted the agreement made on Wednesday which established the first multi-year defense budget plan since 2015. "We’ve reached a very good multi-year plan with the army… We’ve reached a historic agreement. These amounts are good for security and the army, for the economy."

Employment market, housing prices and the cost of living

Regarding the workforce, the finance minister stated that the government is investing “A lot in the integration of populations into the employment market,” and noted that “The government's role is to not interfere with the market and to provide it with infrastructure.”

Also touched upon in his comments was the establishment of a team that will advise on the reduction of the cost of living, his confidence in the government’s ability to pass the “property tax fund” in order to combat housing costs, and the advancement of competition in the transportation sector thanks to the introduction of a tender for international transportation companies.

“We are a young country and we haven't accumulated enough income. Most of the countries we compare to are veterans and have capital. We need to invest. Within a decade and with good work - we can lead the State of Israel in a good direction. Our duty to the workers is not to fuel inflation.”