‘Capitulation’: Opposition slams PM’s deals with Ben Gvir, UTJ to secure budget

Opposition parties harangued Prime Minister Benjamin Netanyahu on Monday for the deals he struck with coalition partners in order to secure their votes in support of the 2023-2024 budget, which will help ensure long-term stability for the government.

After marathon negotiations, Netanyahu reached agreements with the Haredi United Torah Judaism party and the far-right Otzma Yehudit party, which had both threatened to vote against the budget if it did not include additional funds for ultra-Orthodox communities and for the Negev and Galilee Ministry, respectively.

While few expected the two parties to follow through on the threats, given that polling points to losses for both if snap elections were called, a failure to pass the budget by May 29 would cause the government to collapse. If the coalition passes the budget by next Monday as expected, it will not face such a consequential vote for another 22 months.

Parliamentary committee meetings on the budget continued through the night and into Tuesday morning, as coalition representatives aimed to approve the package by early Wednesday.

The large sums Netanyahu agreed to fork over to UTJ and Otzma Yehudit in return for their compliance were the subject of much of the criticism.

“Today’s price for Netanyahu capitulation [was] NIS 500 million ($137 million),” opposition chair Yair Lapid tweeted, using a figure that represented the sum of the amounts the premier agreed to offer the two parties.

Housing and Construction Minister Yitzhak Goldknopf arrives for a meeting at the Prime Minister’s Office in Jerusalem on May 7, 2023. (Yonatan Sindel/Flash90)

National Unity chair Benny Gantz criticized the budget more broadly, tweeting that “in one of the most difficult economic times, when the cost of living is on the rise, when hundreds of thousands of citizens are struggling to make their mortgage payments… Netanyahu and his awful government intend to pass a bad budget that shuts down the engines of growth and severely damages the Israeli economy.”

He went on to plead with the coalition members: “You know the truth. Don’t lend a hand to the destruction of the Israeli economy.”

Yisrael Beytenu chair Avigdor Liberman also called out Finance Minister Bezalel Smotrich for his involvement in the budget negotiations in his statement on the matter. He then quipped, “It is not enough for ultra-Orthodox bigwigs to monopolize the [kosher] slaughter market. Now they are slaughtering the middle class too.”

Labor chair Merav Michaeli took issue with the additional funds UTJ secured for yeshiva students. “Remind me what bonus went to the soldiers who participated in Operation Shield and Arrow or the students who could not make ends meet?”

In a speech before the Knesset plenum on Monday, Hadash-Ta’al MK Ahmad Tibi argued that religious Zionists and the settler movement should be the targets of criticism over the budget, as opposed to the ultra-Orthodox community. He said that settlers are the ones “sucking” from the budget, days after TV host Galit Gutman came under fire for calling the Haredim “leeches.”

Earlier Monday evening, Netanyahu resolved with National Security Minister Itamar Ben Gvir to increase funding for the Negev and Galilee Ministry by additional NIS 250 million ($68.3 million) in 2024, with the money coming from leftover funds that other government ministries do not spend from their budgets this year.

If there are insufficient surpluses, the budget for all other ministries will be retroactively cut to hand the ministry the necessary amount for 2024.

Hours earlier, Netanyahu and Smotrich pledged to boost funding for ultra-Orthodox yeshiva students and their families by up to NIS 250 million, in exchange for UTJ’s support for the state budget.

National Security Minister Itamar Ben Gvir, flanked by police officers, greets people gathered in front of Damascus Gate leading to the Old City of Jerusalem on May 18, 2023. (AHMAD GHARABLI / AFP)

Similar to the deal with Otzma Yehudit, Likud said the funds would be transferred from within the current two-year budget.

The last apparent holdout is far-right coalition MK Avi Maoz, who threatened as recently as Friday to vote against the budget if his Jewish national identity office is not awarded hundreds of millions of shekels, as promised in coalition deals with Likud. But as his Noam party has only a single seat, Maoz’s vote is not necessary to pass the budget.

In addition to the NIS 4.9 billion of discretionary funds that Orthodox schools and religious scholars were allocated mid-May, another NIS 1 billion was provided for a food stamp program demanded by Mizrahi ultra-Orthodox party Shas, as well as additional funds for ultra-Orthodox education, building religious buildings, and supporting Haredi Jewish culture and identity.

The combined demands enraged largely secular corners of Israeli society, who criticize state support that enables religious scholars to eschew employment and military service, and that funds private ultra-Orthodox schools, which inadequately prepare children for the workforce because they are not required to teach core subjects, like math, science, and English.

Growing 5% from 2022 to 2023, the budget grows Israel’s deficit at an economically precarious time. The Finance Ministry predicts that state revenues are expected to drop below their initial forecasts, driven both by global market contractions and market uncertainty tied to the government’s plan to constrain judicial power.

Global credit ratings agencies have noted concerns, with Moody’s in April degrading Israel’s credit outlook in light of “deterioration of governance,” connected to the now-stalled judicial overhaul effort.

Finance Minister Bezalel Smotrich attends a press conference at the Finance Ministry in Jerusalem on May 14, 2023. (Noam Revkin Fenton/Flash90)

Inflation and cost of living both continue to rise, but despite the cost of living being a central campaign promise from Likud and ultra-Orthodox parties, the budget contains no significant measures to combat structural price drivers.

Smotrich has dismissed criticism of failing to address the cost of living, pointing instead to plans to help develop less economically prosperous regions remote from Israel’s financial center. This includes a contentious plan to reshuffle a portion of municipal tax payments from commercially strong, centrally located cities to far-flung areas that lack robust local businesses.

Many of these promises are funded through discretionary funds, which increased from NIS 1.2 billion in 2022 to NIS 13.7 billion for the 2023-2024 budget.