Knesset Finance Committee okays 2023-24 budget, sends it to plenum for final votes

The Knesset Finance Committee approved Tuesday the two-year budget for 2023 and 2024 after a stormy debate that lasted nearly 15 hours.

The budget will move to the Knesset plenum for its final readings next week along with the accompanying Economic Arrangements Bill.

The plan calls for a budget of NIS 484 billion ($132 billion) for 2023, rising to NIS 514 billion ($140 billion) in 2024.

Committee chair MK Moshe Gafni of the United Torah Judaism party said passage of the budget was of “enormous importance” to society and the economy and thanked members of the opposition “who did their job faithfully.”

Chair of the Knesset Finance Committee MK Moshe Gafni votes during a committee meeting on the state budget at the Knesset, Jerusalem, on May 16, 2023. (Yonatan Sindel/Flash90)

The Arrangements Bill, which determines how funds will be disbursed, currently includes the controversial property tax fund, which has sparked a strike and threats of a High Court challenge from many municipalities. The government’s plan would see the redistribution of property tax income from wealthier municipalities to poorer ones.

On Monday, when the committee held a session to approve the fund, there were angry clashes, with at least two participants forcibly ejected.

Finance Minister Bezalel Smotrich has acknowledged that catering to the demands of coalition partners swelled the budget, but has brushed off criticism that his plan does not address the roots of Israel’s ballooning cost of living. On Monday, Smotrich again said that he is committed to fighting market concentration and monopolies — two structural price drivers — but the budget does not contain provisions to do so.

Minister of Finance Bezalel Smotrich attends a press conference at the Ministry of Finance in Jerusalem on May 14, 2023. (Noam Revkin Fenton/Flash90)

Earlier Tuesday, opposition leader MK Yair Lapid reiterated his disapproval of the planned budget, attacking the NIS 13.7 billion ($3.7 billion) in discretionary funds promised to parties in coalition-forming negotiations. The spending package will see significant chunks go to ultra-Orthodox institutions and programs.

Lapid presented his own alternative financial plan and said that if political promises were trimmed out of the government’s package, Israel’s high value-added tax rate could be cut by two percentage points.

Organizers of demonstrations against the government’s planned overhaul of the judiciary, a separate legislative project that has been met with mass protests, said they were organizing a rally in the ultra-Orthodox Gafni’s hometown of Bnei Brak for Wednesday.

They said the protest was “against the backdrop of forecasts indicating continued damage to the Israeli economy, as a result of the looting of the public treasury and the transfer of nearly NIS 14 billion for the benefit of sectoral coalition needs to the Haredi [ultra-Orthodox] parties and for political bribery.”