Knesset approves 2023-2024 budget in all-night vote, patching coalition rift

Lawmakers speed through hundreds of objections to pass fiscal roadmap decried as ‘reckless’ by critics opposed to earmarks for ultra-Orthodox

Prime Minister Benjamin Netanyahu, MKs and ministers after the Knesset passed the 2023-2024 budget, May 23, 2023. (Yonatan Sindel/Flash90)
Prime Minister Benjamin Netanyahu, MKs and ministers after the Knesset passed the 2023-2024 budget, May 23, 2023. (Yonatan Sindel/Flash90)

Knesset lawmakers okayed state budgets for 2023 and 2024 in the early hours of Wednesday morning, ending months of coalition bickering over funding priorities that had threatened to upend Prime Minister Benjamin Netanyahu’s government.

After slogging through a seemingly unending roster of objections leveled by the opposition in hopes of delaying proceedings, MKs finally voted to approve the final parts of the two-year budget just after 6 a.m. Wednesday, capping a boisterous all-nighter in the plenum.

Lawmakers voted 64-55 along coalition lines in the final two readings for the 2023 budget, the 2024 budget, and a bill setting funding policy.

With a May 29 deadline to pass a budget or call new elections looming, Netanyahu scrambled in recent weeks to meet his coalition partners’ demands, clinching some deals Monday to pave the way for the vote, which began late Tuesday.

The passage buys Netanyahu and his government another 18 months until the Knesset must approve another budget and puts to rest the coalition’s largest internal point of contention.

“This is a good budget. It will serve the citizens of Israel,” Finance Minister Bezalel Smotrich said from the Knesset podium after the vote, to cheers and applause from coalition lawmakers standing together in a show of unity to celebrate the milestone.

As the Knesset began voting on the budget, thousands of protesters gathered in Jerusalem, waving Israeli flags and chanting against the government “looting” the state coffers.

Demonstrators similarly criticized the budget for billions in grants to the ultra-Orthodox community, while allowing men in that community to avoid employment and military service.

Israelis protest against a budget proposal in Jerusalem, Tuesday, May 23, 2023. (AP/Mahmoud Illean)

Ahead of the legislative session, the premier sought to project stability to replace the bickering of the past several weeks, thanking his coalition partners for coming together to support the nearly NIS 998 billion ($270 billion) budget, which includes billions in funding for sectoral interests.

“This government will last all four of its years,” he said.

However, the budget process again highlighted fault lines within the hardline government, with three factions publicly pulling their support for the budget unless handed additional funding allocations. Two of the three issues were only resolved Monday.

Prime Minister Benjamin Netanyahu stands in the Knesset plenum during a debate and vote on the state budget, May 23, 2023. (Yonatan Sindel/Flash90)

Critics have accused Netanyahu of going too far to appease ultra-Orthodox, or Haredi, parties at the expense of the general public, with the country battling inflation and a high cost of living.

“This government is terrible for the economy. It said it would reduce cost of living, [but] there’s nothing connected to cost of living in this budget,” opposition leader Yair Lapid said.

“This budget is reckless, it’s a disaster for the Israeli economy and for Israeli society, and it violates the social contract with the State of Israel, which we, our children, and our children’s children will pay for,” he charged.

Opposition leader Yair Lapid holds a press conference about the state budget in Tel Aviv, May 16, 2023. (Tomer Neuberg/Flash90)

Of the NIS 13.7 billion in discretionary spending, NIS 3.7 billion will go to increasing the budget for stipends for full-time Haredi yeshiva students who receive exemptions from military service.

Another NIS 1.2 billion is budgeted for private, non-supervised Haredi educational institutions, many of which do not teach core subjects such as math and English, while additional funds will go to the official Haredi education system, and for construction of buildings for religious purposes and supporting Haredi culture and identity.

Netanyahu and Finance Minister Bezalel Smotrich also agreed to fund expanded stipends to yeshiva students to the tune of up to NIS 250 million ($68 million), using any surplus funds left over from ultra-Orthodox schools.

This deal, which quelled rebellion among a subsection of ultra-Orthodox politicians, also included authorization to retroactively pay yeshiva students a grant from the beginning of 2023.

Finance Minister Bezalel Smotrich at the Knesset in Jerusalem, May 23, 2023. (Yonatan Sindel/Flash90)

Smotrich said the budget will “provide stability and certainty to the economy.” He did not mention warnings from credit agencies that Israel’s ability to borrow could be affected by the judicial overhaul being pursued by the government.

While glossing over internal pressure, Smotrich said that the budget survived “enormous pressure from interested parties, irresponsible strikes and media campaigns,” but the government “did not capitulate.”

Netanyahu and Smotrich secured the last of the votes needed to pass the state budget Monday by promising far-right party Otzma Yehudit to funnel up to NIS 250 million ($68 million) into a party-held ministry that supports development in the Negev and the Galilee regions.

The deals allowed the government to stay just below the mandatory NIS 998 billion-shekel budget ceiling, which would have risked extending the process by requiring a return to Knesset committees to approve the changes.

Most Popular
read more: