Revised 2023 State Budget approved, to be reviewed in coming days

After several discussions and delays stemming from governmental strife over coalition finances, the Finance Committee gave its approval to the revised state budget for 2023 on Tuesday. The budget is now set for a second and third reading in the Knesset, with deliberations commencing tomorrow and final approval votes scheduled for Thursday.

In response to the needs arising from the war's impact on increasing expenditures, an additional sum of NIS 28.9 billion has been allocated for the year 2023. Out of this, NIS 17 billion are earmarked for security expenses, and approximately 12 billion NIS for other expenditures, such as aid to the home front.

Notably, nearly 90% of the budget increase will be sourced from deficit expansion through state borrowing activities. A mere 10%—approximately NIS 3 billion — originates from efficiency measures within the state budget.

How are the finances being broken down?

Detailed breakdowns presented in the Finance Committee reveal that NIS 6.1 billion will be directed towards assisting victims and evacuees. This includes provisions for housing in hotels or grants, alternative education frameworks, funding for reconstruction administration, allowances for victims, and employment encouragement.

Furthermore, around NIS 1.8 billion will be allocated to fortify civil security systems, encompassing the Israel Police, special security services, Shin Bet, fire departments, preparedness grants to local authorities, and shelters. An additional NIS 1.8 billion will be channeled into economic support initiatives, including state-guaranteed loans, employment incentives, agricultural assistance, day-care centers, compensation for cultural institutions, waste disposal, and security payments for irrigation and aviation.

In a significant move, approximately one NIS billion will be directed to the healthcare system, emphasizing hospital reinforcement, enhancements to the mental health system, and procurement of pharmaceuticals.

Tuesday’s budgetary additions included an allocation of NIS 40 million for the he National Information Directorate (is in charge of the public diplomacy activities of various governmental bodies in foreign, security affairs, and on socioeconomic issues,” NIS 15 million for The Kidnapped And Missing Persons Task Force, and NIS 200 thousand for a studio for the Prime Minister’s Office.

MK Naama Lazimi (Labor) criticized the decision, questioning why the Prime Minister’s television studio budget is categorized under 'office headquarters' rather than the “information” or public diplomacy section. 

Finance Minister Smotrich persisted in transferring coalition funds for the settlements in Judea and Samaria, adding another quarter billion of a billion NIS under a reserve for fiscal limit compliance. Of this, NIS 110 million are intended for the office of Orit Strook, Minister of Settlements and National Missions.

While the opposition contended that this is an additional NIS 110 million, boosting Struk's budget to NIS 653 million, the Finance Committee maintains that this sum is part of the previously approved NIS 410 million.

Minister Strook contested that her office's budget was, in fact, reduced. She tweeted, "The office's budget did not grow by NIS 400 million. It didn't increase at all but was reduced. The NIS 138 million are solely for the IDF preparatory academies. Of the 637 million 'coalitional funds', more than half was cut, leaving NIS 307 million. In total, NIS 455 million."

Knesset member Vladimir Beliak (Yesh Atid), from the opposition, a member of the Finance Committee, responded, "Madam Minister, your office's supposed 2023 budget, as approved in May, was NIS 133 million. In the updated budget presented last week, it leaped to 343 million. Yesterday, it rose to 543 million. Today, we discovered at the Committee that another NIS 110 million are in reserve, awaiting legal approval. All in all, from NIS 133 million to NIS 653 million, just in 2023. My advice: Familiarize yourself with the budget numbers of your ministry before responding.” Beliak added: “During these times of war, you are squandering public funds. This needs to stop, and you should resign.”