The Knesset Finance Committee approved, in second and third readings, the proposed state budget for 2013 and 2014. The bill was approved with eight supporters and four opponents; it will go before the Knesset plenum for final approval sometime next week.

If the budget is not passed by the end of the month, the Knesset will automatically be dissolved.

According to the proposal, the state budget for 2013 will stand at NIS 395 billion ($110 billion) and will increase to NIS 405 billion ($112.5 billion) in 2014.

The committee approved cuts to the budgets of the Defense, the Education, and the Transportation ministries.

The budget looks set to pass without a glitch in the Knesset, in light of Prime Minister Benjamin Netanyahu’s comments on Monday that the government would advance a bill making it mandatory to hold a national referendum before handing over any Israeli-controlled lands in a future peace agreement with the Palestinians. Jewish Home leader Naftali Bennett, earlier on Monday, had made government support of such a bill a condition for his party’s support of the proposed budget.

Last week, Finance Minister Yair Lapid agreed to soften some of the austerity measures in the budget. The adjustments are designed to slightly reduce the impact of the cuts on lower- and middle-class Israelis.

MK Nissan Slomiansky (Jewish Home), the chairman of the Knesset Finance Committee, gave his approval to the changes Wednesday, including the revocation of an across-the-board 1.5-percent hike in income tax.

Instead, there will be a 1% income tax increase on monthly wages of up to NIS 14,000 ($3,900) and a 1.5% tax on income between NIS 14,000 and NIS 22,000. Salaries above NIS 22,000 a month will be taxed at an additional 2%.