Finance Committee begins debate over 2024 budget amendment

The Finance Committee began on Monday to prepare for its second and third reading of a bill proposed by Finance Minister Bezalel Smotrich to expand government spending by approximately NIS 3.4 billion.

Smotrich himself attended the meeting and presented the bill. It covers a number of war-related issues, including funding for evacuees and released hostages and their families until the end of 2024; finances for businesses affected by the war; increased funding for combat reservists and their families, and more.

Smotrich argued that the increase in government spending will not lead to a rise in the state’s budget deficit at year’s end since it will be offset by higher-than-expected national income from taxes.

Members of the Knesset from the opposition took the opportunity of the finance minister’s presence in the committee to criticize the bill and the government’s economic performance in general.

Unnecessary government spending

Yesh Atid MK Vladimir Beliak, the opposition’s coordinator in the committee, argued that the addition in government spending was unnecessary since the government could procure the necessary funds by shutting down government ministries and cutting coalition funding.

Beliak also criticized Smotrich for the fact that inflation in Israel had reached 3.6%, higher than the 1%-3% target determined by the Bank of Israel.

Further, he pointed out that Israel had already received credit rating downgrades and negative outlooks from all three major rating companies, which, according to Beliak, will cost the state over NIS 30 billion in 2025 to pay for increased interest rates on state borrowing. Moreover, Israel’s growth projection recently dropped from 1.9% to 1.1%, Beliak said. Finally, prices on goods, he noted, such as fruits and vegetables, had increased by 20% and more.

Beliak said that the bill being discussed in the committee was thus both inefficient and insufficient to turn the economy around and called on Smotrich to resign.