Knesset advances NIS 30 billion in new wartime funds, over intra-coalition objections

NIS 17 billion for military and NIS 13 billion for home front mostly funded by increased deficit; multiple ministries seemingly unrelated to war effort receive major funding boosts

Carrie Keller-Lynn is a former political and legal correspondent for The Times of Israel

Finance Minister Bezalel Smotrich presents his 2023 wartime budget update to the Knesset, December 6, 2023 (Yonatan Sindel/Flash90)
Finance Minister Bezalel Smotrich presents his 2023 wartime budget update to the Knesset, December 6, 2023 (Yonatan Sindel/Flash90)

The Knesset advanced plans Wednesday to allocate just over NIS 30 billion ($8 billion) to the war effort in Gaza, NIS 26 billion of which will be financed by enlarging the national debt.

The plenum approved the plan in the first of three required floor votes, and deliberations were then to be held in committee ahead of the final voting.

The updated 2023 budget allocates some NIS 17 billion to the military and about NIS 13.3 billion to civil support. Although figures indicate that the changes will also funnel increased funding to a number of ministries unrelated to the war effort and deemed by many in the public to be unnecessary offices.

Only a little over NIS 4 billion of the NIS 30 billion plan will be covered by funds redirected from the 2023-2024 budget approved this May, Finance Minister Bezalel Smotrich said. Cuts to various government ministries will form the majority of this reallocation, although the amount will also be partially covered by other sources, including roughly NIS 1.6 billion in political earmarks repurposed for the war effort and a contribution from the Jewish National Fund, Smotrich’s office said.

On Sunday the Knesset advanced a parallel bill to increase the operational deficit, which will enable increased spending to support the bulk of the 2023 budget update.

Acknowledging the wartime need to increase spending, Smotrich cautioned that Israel will have to cover its increased national debt in the future: “There are no free lunches and what we spend today we will pay for with interest in the coming years,” he told the plenum.

Israeli troops operating in the Gaza Strip in an undated photo released for publication on December 6, 2023 (Israel Defense Forces)

Figures published Wednesday evening by Channel 12 news indicated that a number of ministries seemingly unrelated to the ongoing war had their budgets significantly increased in the updated 2023 budget.

The Jerusalem Affairs Ministry, run by UTJ’s Meir Porush, received NIS 68 million, up from NIS 24 million in the original budget; the Heritage Ministry, headed by Religious Zionism’s Amichai Eliyahu, got NIS 101 million, up from NIS 74 million; the National Missions Ministry, run by Religious Zionism’s Orit Strock, received NIS 343 million, up from NIS 133 million; the Women’s Advancement Ministry, headed by Likud’s May Golan, got NIS 15 million, up from NIS 3.5 million; the Regional Cooperation Ministry, run by Likud’s David Amsalem, received NIS 38 million, up from NIS 22 million; the Diaspora Affairs Ministry headed by Likud’s Amichai Chikli got NIS 91 million, up from NIS 56 million.

The update cleared its first Knesset reading on Wednesday 62-52, and over objections from the National Unity party, which joined the coalition after the war started, and Economy Minister Nir Barkat.

Smotrich has taken flak for developing a plan that would ultimately enable hundreds of millions of shekels to flow to sectoral political interests, as part of about NIS 1 billion in previously pledged coalition discretionary funds whose disbursal was not canceled by the war.

Deflecting the criticism leveled by both the National Unity party and the opposition, Smotrich claimed that he “didn’t apply my priorities personally as finance minister” but “set a completely technical rigid criteria” for determining funding.

Barkat is demanding NIS 250 million ($68m) for his ministry to prop up ailing businesses near the southern and northern borders.

The proposed budget update only covers the last six weeks of 2023, and a separate budgetary reevaluation may occur for 2024.

Economy Minister Nir Barkat at the Knesset in Jerusalem, on December 6, 2023 (Yonatan Sindel/Flash90)

“The treasury doesn’t call us back. It’s detached from events,” Barkat said of the budget update, reaffirming his criticism that the Finance Ministry built the budget without addressing problems faced by businesses threatened by the war.

“If the businesses in the combat zones collapse and do not survive the war – this is a victory for Hamas,” Barkat added.

Also striking out against the budget’s funding priorities, opposition lawmaker Merav Cohen slammed the government for cutting “life-saving services” as part of its funding redistribution.

Health, welfare, and social services are to be trimmed for the war effort, but “billions for Torah institutions” are still being supplied, the Yesh Atid MK wrote on X.

Likud MK Yuli Edelstein, who like Barkat also hails from the ruling Likud party, told the plenum that he had concerns that funds not directly connected to the war effort were padded within the budget. Without providing details, Edelstein suggested removing these line items during the next phase of the budget bill’s  preparation, to be conducted in the Knesset’s Finance Committee.

Last week, Smotrich said that the budget contained about NIS 390 million for security priorities to protect settlers in the West Bank.

The opposition’s Labor party said the budget was going to “go first and foremost to the settlements and to the messianic and dangerous idea that has been destroying the State of Israel for many years.” It was referencing Smotrich’s religious Zionist ideology, which ties religious redemption to maintaining Jewish sovereignty over the expansive Biblical conception of the Land of Israel.

“This budget represents a distorted order of priorities in which the settlements come first, at the expense of everything else, even when the results are devastating and critical,” Labor party chief Merav Michaeli said in an address to the Knesset floor.

Prior to parliamentary debate on the budget, Opposition Leader Yair Lapid urged coalition members to vote against the budget, saying that passing it as presented would permit sectoral looting of public coffers.

Opposition Leader Yair Lapid speaks during a press conference in Tel Aviv, October 26, 2023. (Avshalom Sassoni/Flash90)

Finalizing the budget paves a path for the about NIS 1 billion in currently frozen coalition funds to flow to ultra-Orthodox and West Bank settler priorities, among other uses.

“This is not a budget, this is an illegal order issued to MKs to steal public money during wartime [as part of] politics,” Lapid said, opening a special conference on the economy organized by his Yesh Atid party.

In comments directed to coalition members, Lapid said: “What are you doing? How are you letting this happen? How are you doing this to our soldiers and our commanders? To families? To reservists? How are you doing this to the people of Israel?”

The opposition leader called on lawmakers “who still have a conscience and sense of responsibility to the nation to vote against this disgraceful budget” and to “stop the shame.”

Gantz’s party, which entered the coalition for the purposes of the emergency government and is expected to leave when the war ends, has spoken out strongly against the budget and voted against it, but has not threatened to quit.

After clearing its next phase in the Finance Committee, the budget will return to the plenum for its consecutive second and third readings, expected next week. The plan was approved by the cabinet last week, over Barkat and National Unity’s objections.

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