Knesset approves 2017-2018 budget in marathon session
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Knesset approves 2017-2018 budget in marathon session

Biennial fiscal plan passes with 63 votes in favor and 50 against, after furious row over slashed ministerial funds

Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon attend the Knesset vote on the 2017-18 state budget. on December 21, 2016. (Photo by Yonatan Sindel/Flash90)
Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon attend the Knesset vote on the 2017-18 state budget. on December 21, 2016. (Photo by Yonatan Sindel/Flash90)

Lawmakers on Wednesday gave its final approval to the NIS 906 billion ($236 billion) two-year budget for 2017 and 2018, in a marathon session at the Knesset in Jerusalem.

The biennial budget easily passed its second and third readings as coalition MKs turned out en masse, clinching a significant boost for the government’s stability in the upcoming two years. Sixty-three of Israel’s 120 lawmakers voted in favor and 50 voted against.

“Today I am proud to present you with another budget and a strong, robust, stable and growing Israeli economy,” Finance Minister Moshe Kahlon (Kulanu) told the plenum, according to Channel 2. “[This] is a social and colorblind budget. A budget to aid and assist the entire population.”

The budget was set at a net expenditure of NIS 446 billion ($116 billion) for 2017 and NIS 460 billion ($119 billion) for 2018, with an additional NIS 87 billion ($22 billion) in revenue-dependent expenditure.

Illustrative. Lawmakers vote in the Knesset plenum, July 11, 2016. (Yonatan Sindel/Flash90)
Illustrative. Lawmakers vote in the Knesset plenum, July 11, 2016. (Yonatan Sindel/Flash90)

According to the final figures released by the Knesset’s Finance Committee on Tuesday, as it approved the budget for its final readings, the Health Ministry budget was NIS 33 billion ($8.6 billion) for 2017 and NIS 35 billion ($9.1 billion) in 2018, with another NIS 10 billion ($2.6 billion) a year for public hospitals; the Education Ministry budget, second in size only to the defense budget, was set at NIS 57 billion ($14 billion) for 2017 and NIS 59.4 billion ($15.4 billion) for 2018; the defense budget was NIS 70 billion ($18.2 billion) for each year, while state-funded religious services received NIS 640-660 million ($167 million-$172 million) annually.

One office that was expected to see a large increase was the Transportation Ministry, with nearly an NIS 19 billion ($4.9 billion) budget in 2017, and NIS 19.5 billion($5 billion) in 2018, boosted by a 50% jump in investments in public transport compared to the 2016 budget. These allocations were designed to cover construction on two new light rail lines in Tel Aviv, which has the greatest population density in Israel but where just 20% of residents use public transportation to get around the log-jammed metropolis. The government will also green-light a new light rail route in Jerusalem, an extension of the Haifa metro, a new line between the northern cities of Haifa and Nazareth, and a new train route between Hadera and Lod.

Earlier in the week, the cabinet approved NIS 1.2 billion ($310 million) in across-the-board cuts across government ministries for the 2017-2018 budget, partly to establish the new public broadcasting corporation, build new schools in ultra-Orthodox communities and finance the relocation of the Amona settlement. Cuts to the education, health and welfare ministries and local authorities were reportedly among the austerity measures approved by ministers in the vote. The cuts will be partly offset by modest growth approved Thursday for next year’s education, welfare and national insurance budgets.

Prime Minister Benjamin Netanyahu leads the weekly cabinet meeting at the Prime Minister's Office in Jerusalem on December 18, 2016. (Marc Israel Sellem/POOL)
Prime Minister Benjamin Netanyahu leads the weekly cabinet meeting at the Prime Minister’s Office in Jerusalem on December 18, 2016. (Marc Israel Sellem/POOL)

The Finance Ministry said the slashed funds would also help cover costs of armoring public buses in the West Bank against gunfire, the employment of Palestinian workers in Israel and various expenditures promised in coalition agreements reached since the budget was first proposed, including funds demanded by Yisrael Beytenu when it joined the ruling coalition in May.

On Wednesday, an umbrella organization representing Israel’s local municipalities embarked on a country-wide strike in protest of cuts to state grants to local governments, which they argue will mean the loss of hundreds of millions of shekels for local services such as garbage collection and school maintenance. High schools and kindergartens as well as municipal offices were shuttered in cities across the country, and other basic municipal services were on hold Wednesday in the open-ended strike.

Much of the opposition’s criticism of the budget on Tuesday and Wednesday focused on the eleventh-hour cuts approved by the cabinet.

“All the positive things that the finance minister has done are erased when we come to the across-the-board cuts,” said Zionist Union MK Shelly Yachimovich on Tuesday. Yachimovich criticized the decision to apply the cuts equally to all ministries in order to avoid political fights between ministers, describing the decision as “lazy,” “dumb” and “indiscriminate,” and a “guillotine coming down in one fell swoop.”

“Across-the-board cuts simply fall on all the ministries at one time, rather than studying the issue to see where you can cut and where not,” she said.

Her fellow party member MK Manuel Trajtenberg, a noted economist who once served as Netanyahu’s top economic adviser, also slammed the move on Wednesday.

“The across-the-board cuts are part of the scam that is the Netanyahu government’s hidden taxes, which we are being forced to take from education, transportation, and infrastructure, which, according to Netanyahu’s view, the government does not need to provide, and the costs fall on us,” he said.

Marissa Newman contributed to this report.

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