Israel's budget: Netanyahu gives in to demands from haredim, Ben-Gvir

Agudat Yisrael will receive NIS 250 million in June for its yeshiva students, the Likud Party said Monday. United Torah Judaism’s hassidic faction had threatened to topple the government if its dispute with Likud and the Finance Ministry was not resolved.

Another smaller disagreement about the budget was solved on Monday evening as Likud and Otzma Yehudit agreed to a NIS 250 million raise in the Development of the Negev and Galilee Ministry, with the budgetary source being government-wide ministerial surplus for the 2023 year.

Solving the situation with both Agudat Yisrael and Otzma Yehudit clears the way for the budget to pass as soon as Wednesday.

The impasse developed last week after Agudat Yisrael demanded approximately NIS 670m. in funding retroactively to cover the costs of its yeshivot and education systems from the beginning of 2023.

The current coalition funding awards yeshivot NIS 1.6 billion to raise the monthly stipend for each student from about NIS 600 to NIS 1,173 from June until the end of 2023. Agudat Yisrael said the agreement had been to raise the stipend retroactively from January.

According to the agreement, the Finance Ministry will give each yeshiva student a one-time grant of about NIS 2,000, the aggregate amount that each student would have enjoyed had the stipend been increased in January. This stipend, which costs approximately NIS 250m., will come from the NIS 1.6b. that was earmarked for the rest of 2023. At the end of the year, UTJ will use what is left over to cover the remaining deficit.

This will allow yeshiva students to receive the stipend increase for all of 2023, but the budget bill does not need to be amended, according to a representative of Finance Minister Bezalel Smotrich. It also serves as a message to other coalition members who are demanding more funding for their ministries: that they can choose to divide up their coalition funds however they like, but they will not receive anything more from the national budget.

Agudat Yisrael decided not to insist on the rest of the funds it had demanded, which were earmarked for elementary schools. The extra funding for these schools will begin in 2024.

The agreement effectively ended the largest threat to the budget’s passage and thus to the government’s existence, as failure to pass the budget by next Monday would automatically dissolve the Knesset and necessitate a new election.

In a letter to Attorney-General Gali Baharav-Miara after the agreement between Likud and Agudat Yisrael was announced, Yisrael Beytenu MK Oded Forer said the agreement was illegal. Budget decisions cannot be made without a budgetary source, he wrote. The agreement between Likud and Agudat Yisrael to fill budget gaps by using “future leftover funds” did not point to a clear budgetary source and therefore violated the law, he said.

Forer said the attorney-general should convey her opinion on the matter and, if necessary, direct the accountant-general not to respect the order.

Knesset begins discussing state budget

The debate in the Knesset plenum over the budget began on Monday at 9 a.m. and is scheduled to last until Tuesday evening at 8:30 p.m. The MKs will debate the package of seven laws that make up the budget. They will not remain in the plenum the entire time and will rotate so that they can rest.

Beginning on Tuesday evening at about 9 p.m., the plenum will begin voting on the second reading of the bills, which will include more than 800 votes, as every clause of the budget bills must be approved separately. Once this ends, the plenum will hold a third and final reading of the bills, after which the plenum will vote to approve them in their entirety. By passing this vote, the bills become law.

The coalition hopes to pass the entire package into law by Shavuot, which begins Thursday evening. However, it scheduled another plenum session at 10 a.m. for next Sunday morning in case this is delayed.

In a petition to the High Court of Justice on Monday, the National Union of Israel Students said the decision to increase funding for yeshivot was discriminatory to other academic institutions.

It asked the High Court to issue an interim order that would require the coalition to explain the discrepancy in the funding between two sectors and why other educational institutions are not being given more funding. The religious institutions were receiving more financing, but the funding of parallel nonreligious institutions was dwindling with each budget, it said.

The budget allocation was discriminatory based on the Basic Law: Human Dignity and Liberty, and the decision by the government was a disproportionate act against equality for students, the students’ union petition said.

The petition also demanded that the government explain why the budget was going against the recommendations of the Finance Ministry’s chief economist that the funds would create a disincentive for haredi men to integrate into the workforce.