In a success for Prime Minister Naftali Bennett's coalition, the Knesset on Thursday gave preliminary approval to a 2021-2022 state budget, the country's first ratified spending package in more than three years.
Follow Israel Hayom on Facebook and Twitter
Lawmakers passed the 14-month budget bill in a first reading, voting 59-54 on the 2021 budget and 59-53 for 2022. Votes for final approval are due November 4.
After passing the budget framework bill, it then passed the accompanying Arrangements Law – which determines how funds will be implemented – and finally the 2021 and 2022 budget bills themselves.
All bills will now head to the Knesset Finance Committee and must pass their second and third readings in the plenum to become law.
The budget earmarked NIS 432.3 billion ($134.85 billion) in 2021 spending and NIS 452.5 billion ($141.15 billion) for 2022 – including funds to fight the coronavirus pandemic.
The budget deficit was projected at 6.8% of gross domestic product in 2021 and 3.9% in 2022, after hitting 11.6% in 2020.
Bennett and Finance Minister Avigdor Lieberman had come under pressure from ministers and lawmakers upset at some planned reforms, while others sought higher funding.
Two years of political stalemate and four elections had left Israel still using a pro-rated version of the 2019 state budget passed in March 2018.
A refusal by Netanyahu last year to agree to a two-year budget for 2020 and 2021 helped bring down his coalition.
"I've been in this chamber for many years, and I can't remember a period like this. The budget is a priorities list of the government, and this deliberation symbolizes more than anything the end of this crazy period and the return to normality. This is proof that this government functions and the coalition works," said Lieberman.
"In good time, there is a budget in Israel. After three years of stagnation, Israel returns to work," Bennett said after the cabinet vote.
"It is a budget which will strengthen the defense establishment and the health system, and which will care for the incomes of Israeli citizens. It is a budget that will care for citizens, not political interests. This is another step towards a better country – more united and more stable," he added.
Opposition leader Benjamin Netanyahu participated in the proceedings from behind a glass partition in a specially designed quarantine section in the plenum. Netanyahu recently returned from a vacation in Hawaii and, in accordance with coronavirus guidelines, is required to isolate for a week.
Speaking from the gallery, Netanyahu called the budget "terrible."
"It has cutbacks and raised taxes, in complete contradiction to your assurances," he said. "You have harmed the farmers, the weaker classes, the periphery, the middle class."
The Likud chairman has also lambasted the coalition for the billions promised to coalition member Ra'am – an Islamist party that supports Palestinian independence – and a deal recently announced by Defense Minister Benny Gantz to give the Palestinian Authority a NIS 500 million ($155 million) loan in an effort to salvage its struggling economy.
"You gave a fortune to [Ra'am chairman] Mansour Abbas and [Palestinian Authority President] Mahmoud Abbas because you depend on the NIS 53 billion you promised Ra'am," Netanyahu said.
The coalition also plans to raise municipal taxes, and has also reduced subsidies for public transportation, steps that Netanyahu said would harm the lower socioeconomic sectors.
The two-year state budget includes sweeping reforms of the kashrut establishment and the agriculture industry, steep taxes on disposable plasticware and sugary drinks, and considerable changes to import policies.
In 2022, the education budget will stand at NIS 69.7 (around $21.7 billion) and the health care budget will be NIS 44.8 billion (around $14 billion). The defense budget will be around NIS 73.3 billion (around $24.1 billion). Additionally, some NIS 36.1 billion (around $11.3 billion) were earmarked for development and transportation, the budget for the Labor, Social Affairs and Social Services Ministry and the Holocaust Survivors Rights Authority will be around NIS 14.9 billion (around $4.6 billion), and the budget for institutions of higher learning will stand at about NIS 12.3 billion (around $3.8 billion).
Likud MK and former Knesset Speaker Yariv Levin took particular exception to the reduction of public transportation subsidies.
"We worked systematically to cancel the differences between the periphery and the center of the country, and this started with public transportation," said Levin. "Now you come along and what is the first thing you do in the field of transportation? You impose a 'periphery tax' for those who work in the center and Tel Aviv."
Shas Chairman MK Arye Deri also condemned the budget.
Subscribe to Israel Hayom's daily newsletter and never miss our top stories!
"This is a bad budget of a fat government that is disconnected from the people," declared Deri. "It is a budget without mercy that does intentional harm to the weakest families in Israeli society and the residents of the periphery. The Bennett-Lieberman government will be remembered as one that passed an anti-social budget."
Netanyahu, meanwhile, also addressed Bennett's recent visit to the White House, where he met with US President Joe Biden.
"The only thing that came from the meeting with President Biden is Bennett's promise that Israel will not publicly oppose a nuclear deal with Iran. A nuclear agreement with Iran threatens our very existence, which is why I worked against it everywhere and in every way possible. Had we not done so, whether on the diplomatic level and operational level, Iran would have already had a nuclear arsenal. You [the government], within eight weeks, handcuffed us diplomatically and operationally," he said.
