Israel's Knesset set for first vote on renewed 2024 budget

The Knesset on Wednesday night held its first vote on a renewed national budget for the year 2024. Finance Minister Bezalel Smotrich placed the budget on the Knesset floor on Monday, over two weeks after a deadline set by the quasi-constitutional Basic Law: The State Economy.

The budget includes three separate law proposals, and they were voted on after press time on Wednesday night, as opposition members delayed the voting as much as possible. Should the budget bills pass, they then move to the Knesset Finance Committee led by United Torah Judaism MK Moshe Gafni, where they will be prepared for their return to the Knesset floor for their second and third reading.

Israel's Basic Law: The State Economy requires that the Knesset have 30 days to debate the renewed budget. Even if the Knesset does not use up all of its allocated time, the budget debates will almost certainly not meet their deadline, February 19. On February 19, therefore, there will be a "flat" budget cut across all government ministries of approximately 5% of their current budget.

This means that many of the ministries will not be able to make new transactions until the new budget passes, and, according to a spokesperson from the finance ministry, many ministries will be "paralyzed" and unable to function until then. Salaries of government employees are not affected by "flat" budget cuts, the spokesperson said.

Original 2024 budget passed in May 2023

The original 2024 budget passed as part of a two-year budget in May 2023. Relative to the original version, the renewed budget includes cuts in funding of the Culture and Sport Ministry, Construction and Housing Ministry, Energy Ministry, Transportation Ministry, and others, as well as cuts in many ministries' funds earmarked for planning. The largest budget increase is to the Defense Ministry – whose budget rose by NIS 55 billion.

The proposed budget also includes a NIS 2 billion cut in coalition funding – funds that go to "implement political agreements" – out of the original approximately NIS 8 billion. The coalition funds have garnered public criticism, as opponents have argued that they are based on sectorial interests and do not reflect a change in priorities due to Israel being at war. The coalition funds include funding for haredi school systems that do not teach core secular curriculums, as well as to projects connected to settlements.

Smotrich said while presenting the bill that the new budget included two main components: first, a "dramatic" increase in the defense budget and other expenditures on civilian matters that are necessary for the war effort, and second, cuts in the rest of the budget and increases in the state income. The budget was "responsible," and will "enable the government to manage the war until victory."

Opposition leader and Yesh Atid chairman MK Yair Lapid criticized the budget in his speech during the Knesset debate.

"The budget that is being discussed today brings us back to everything that led to the events of October 7 – the rudeness, complete indifference to the other side, political considerations above all else, a world where you know that the government does not care about you and cares only about itself, (and) you know that it is totally cynical," Lapid said.