As the coalition moves forward with the next state budget, lawmakers on Tuesday were voting to approve NIS 13.7 billion ($3.7 billion) worth of funds the government has allocated to meet the spending demands of its members, including a number of contentious earmarks.
The spending package, significant chunks of which will go to ultra-Orthodox institutions and programs, was approved Sunday by the cabinet. At Attorney General Gali Baharav-Miara’s instruction, details of the coalition budgets were made public the next evening by the Knesset Finance Committee.
Large portions of the budget are slated to come under the control of Finance Committee Chairman Moshe Gafni, Knesset Speaker Amir Ohana and coalition chairman Ofir Katz. Gafni is a leader of United Torah Judaism, while Ohana and Katz are members of Prime Minister Benjamin Netanyahu’s Likud party, which has made generous pledges of billions of shekels to secure the support of its ultra-Orthodox and far-right coalition partners.
The money includes NIS 2.5 million to set up a visitor’s center at the Tomb of the Patriarchs in the flashpoint West Bank city of Hebron; NIS 4.5 million for commemorations at the grave of the Baba Sali, a late Moroccan-born kabbalist; and over NIS 19 million for a heritage center dedicated to Rehavam “Gandhi” Ze’evi, a far-right IDF general and minister who was assassinated by Palestinian terrorists in 2001.
Ze’evi has become increasingly controversial in recent years following an investigative TV report in 2016 that aired allegations of rape and intimidation against him, with some calling to scrap the official state commemorations for him.
Other items include more than NIS 10 million for “a basket of incentives to encourage” Jews to move to so-called mixed cities that have both major Jewish and Arab populations; over NIS 11 for “fertility”; and close to NIS 5 million to promote the legacy of the late Rabbi Chaim Druckman, who was a prominent national religious leader and advocate of the settlement movement. The document outlining the funds gave no details as to what the money for “fertility” would be spent on, describing it only as “support for religious services.” It also did not spell out how nearly NIS 6 million for “counseling and training on family purity” will be spent.
Also in the coalition budget was NIS 4 million to fund scholarships for former soldiers, NIS 4 million to help with the housing costs for lone soldiers, and NIS 4 million to build hospital beds for “special communities.”
The money will now be approved as part of the proposed two-year, 2023-2024 trillion-shekel overall budget, which the coalition must pass by May 29 or risk triggering an automatic dissolution of parliament and snap elections.
These coalition funds have in recent years been distributed from the state budget to preferred and sectoral goals demanded by the parties as a condition for their support to pass the budget. At the end of March, the Knesset approved in its first reading the state’s 2023-2024 overall budget. It allocates NIS 484.8 billion this year and NIS 513.7 billion in 2024, up from NIS 452.5 billion in 2022.
Opponents of the government have railed at the proposed spending, with opposition leader Yair Lapid calling the amount and allocation of coalition funds “irresponsible and corrupt.”
Ahead of Sunday’s cabinet vote, the Finance Ministry’s Budgets Department head Yogev Gardos warned that the allocation of funds to ultra-Orthodox institutions and initiatives creates negative incentives for Haredi men to seek employment and will harm the labor market and the economy as a whole.
“Even before the implementation of the government’s decision and its expected negative effects on the economy, with no change in the employment rate among ultra-Orthodox men, the loss of cumulative GDP until the year 2060 is expected to be NIS 6.7 trillion,” Gardos warned in a report.
Furthermore, Gardos cautioned, if more Haredi men are not encouraged to work, by 2065 the government will have to increase direct taxes by 16 percent to maintain the same level of services that it provides without increasing the deficit.
Israel’s ultra-Orthodox population is expected to grow from 13.5% of the total population currently to 16% in 2030. The ultra-Orthodox population’s current growth rate of 4% is the fastest of any group in Israel, according to Central Bureau of Statistics data.