After the budget hurdle, is it smooth sailing for the government? - analysis

Prime Minister Benjamin Netanyahu issued a triumphant video statement on Wednesday afternoon.

“Yesterday was a big day for the State of Israel. The government under my leadership brought a large accomplishment to the citizens of Israel. We passed a two-year budget, which grants stability and momentum to the economy and also grants four stable years in our politics, which is the important thing,” the prime minister said, adding that “now we can devote all of our efforts to lowering the high cost of living, and we will do so with energy and from all possible directions.”

Many leading economists, including within the Finance Ministry, expressed significant reservations about the budget – especially the billions of shekels earmarked for private or semi-private haredi (ultra-Orthodox) schools that do not teach core secular studies, or for religious academies (yeshivot).

But while the budget’s economic implications will play out in the future, what is clear is that Netanyahu has succeeded in righting the coalition, buffeted by chaos and controversy from its beginning.

The coalition can expect more stability from now on

Netanyahu and fellow coalition leaders can breathe deeply. The series of events that began even before the formation of the government, which included prolonged negotiations over coalition agreements, have come full circle. The budget has passed; every party knows exactly what it will receive. Netanyahu’s partners can no longer use the budget to make threats to get their way.

Netanyahu was able to navigate around the many pitfalls and hurdles posed by his own party members and his coalition partners – and there were many, including the judicial reform and the public unrest that it ignited, the haredi conscription bill, National Security Minister MK Itamar Ben-Gvir’s threat to quit the government on more than one occasion, the funding for haredi education, and more.

Barring extraordinary circumstances, the government and coalition can expect relatively smooth sailing for the next year and a half, when the 2025 budget will emerge on the horizon.

Nonetheless, there are still a number of issues in the coming months that could rock the boat.

Judicial reform will be forced back into the limelight because according to the law, the Judicial Selection Committee must be organized by June 15. The committee’s makeup is one of the most hotly contested issues regarding judicial reform. The nine-member committee will conform to its traditional makeup – three judges, two representatives of the Israel Bar Association, two ministers and two MKs. But Justice Minister Yariv Levin may refuse to convene the committee to leave open the possibility of altering it. This will likely irk the opposition and protest movements.

Remaining challenges in the coalition

The next date to look out for is July 31, when the IDF Conscription Law is set to expire. The law was struck down by the High Court in 2018 over what the court ruled was unconstitutional inequality over the exemptions given to haredi men. Netanyahu, Finance Minister Bezalel Smotrich and Defense Minister Yoav Gallant expressed interest in lowering the exemption age for haredim from 26 to somewhere between 21-23, so as to enable haredi men to enter the workforce sooner. Smotrich even called this a policy move from “equality in the burden of military service” to “equality in the economic burden.”

Many secular Israelis are unlikely to buy this, and if the July 31 deadline remains, the country may experience another wave of protests. The deadline, however, has been pushed off many times already – and the coalition could request an additional postponement, possibly to December.

The Judicial Selection Committee and conscription bill are two hotly contested issues drawing close. Ben-Gvir may create a crisis to score political points. However, none, now with the budget passed, is likely to bring down the government.