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Knesset legal adviser rules parts of bill problematic

In major challenge for coalition, Knesset to vote on 1st reading of state budget

Understandings reached on several issues but Meretz and Yamina still at odds over regulatory reform included in bill; budget must pass 3 readings by November 4 or Knesset dissolves

Finance Minister Avigdor Liberman Foreign minister Yair Lapid at the Knesset on June 13, 2021.(Yonatan Sindel/Flash90)
Finance Minister Avigdor Liberman Foreign minister Yair Lapid at the Knesset on June 13, 2021.(Yonatan Sindel/Flash90)

Israel’s fledgling government faces one of its most formidable challenges yet as it attempts to pass the state budget in a first reading in the Knesset on Thursday amid signs of dissent from some parties.

Failure to pass the pair of budget bills — one to earmark funds and an Arrangements Bill to determine how allocation will be implemented — in three readings in the Knesset plenum by a November 4 deadline would automatically dissolve parliament and trigger elections.

The budget will require all the votes of the wafer-thin coalition to pass, with the opposition of a single lawmaker potentially able to bring it down. The diverse composition of the government led by Prime Minister Naftali Bennett — made up of right-wing, centrist and left-wing parties — complicates the effort.

Negotiations were still taking place up until the last moment, with the parties solving several disagreements but a key dispute remaining between the left-wing Meretz party and Bennett’s Yamina over a regulatory reform that is included in the Arrangements Bill.

Meretz has expressed concern that the reform, meant to streamline bureaucracy, will benefit business and industry at the cost of public health and the environment.

In negotiations Wednesday, Meretz MK Mossi Raz said he supports the bill, but not in its current form.

Meretz MK Mossi Raz in the Knesset on June 22, 2021. (Yonatan Sindel/Flash90)

Channel 13 news quoted Yamina sources as saying that they were standing their ground and not prepared to change a word of the bill even if it meant bringing down the coalition.

In response, Mertz issued a statement saying that it supported the party’s lawmakers to “take any action they feel is necessary to reach an agreement with the Treasury, including not backing the Arrangements Bill.”

However, the statement called on the lawmakers to continue with negations “out of responsibility to the unity of the coalition.”

Meanwhile, agreements were reached Thursday morning on two other problematic issues that threatened to derail the budget.

One of them was a reform that would see import restrictions eased on agricultural products. Proponents within the coalition — including Yamina and Yisrael Beytenu — have been pushing the reform, saying it will lower the prices, while critics — including Labor and Meretz — say it will harm the local industry.

Agriculture Minister Oded Forer (Yisrael Beytenu) said the reform would be separated from the Arrangements Bill at the demand of Labor and Meretz, to hold discussions with representatives of Israeli farmers.

Farmers block the Bilu Junction as part of protests around the country against the finance and agriculture ministries plan to open up the fruit and vegetable market for import, on July 29, 2021. (Yossi Aloni/Flash90)

Another area where agreements were reached was a reform to gradually raise the retirement age for women from 62 to 65 over the course of 11 years, at a rate of four months a year for three years, and three months a year for a further eight years.

Several female lawmakers had opposed the plan, and as part of the understandings Thursday, coalition officials agreed to double work stipends to encourage continued work and cut some of the bureaucracy needed to receive it. Additionally, tens of millions of shekels were allocated to help women over the age of 62 who stopped working between the ages of 57-60.

Earlier this week, Finance Minister Avigdor Liberman predicted both bills will have a majority backing in the Knesset, though the coalition government has the slimmest possible majority.

“It is the most social-minded budget in the history of the country,” Liberman said.

He rejected any possible political fighting over the Arrangements Bill, which can be more prone to partisan dispute, telling reporters that lawmakers will have to support both bills together.

“They are a single unit; you can’t vote for the first and oppose the second,” he said.

Liberman presented the plan at a press briefing in which he said the two-year budget would allocate NIS 432 billion ($135 billion) for 2021 and at NIS 452 billion ($140 billion) for 2022.

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.

The Cabinet approves the state budget, August 2, 2021 (GPO/Amos Ben Gershom)

In an additional challenge to the budget, Knesset legal adviser Sagit Afik published an opinion that criticized some of the reforms in the Arrangements Bill.

Afik said it was problematic to push through such wide-ranging reforms in the bill and not through standard legislation.

She singled out the regulatory reform and parts of the agriculture reform plans.

The cabinet approved the budget at the beginning of the month, the first time a budget has been approved in three years, due to a political deadlock that eventually ended with the installation of the current coalition in June after three election campaigns.

In the previous government, then-prime minister Benjamin Netanyahu refused to pass a budget, allowing him to call elections without his then-coalition partner Defense Minister Benny Gantz immediately becoming transitional prime minister under the terms of their rotation deal.

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