From Bill aiming to increase 2024 state budget by more than NIS 3 billion passes first reading
Sam Sokol is the Times of Israel's political correspondent. He was previously a reporter for the Jerusalem Post, Jewish Telegraphic Agency and Haaretz. He is the author of "Putin’s Hybrid War and the Jews"
Lawmakers pass in its first reading the second of two related bills necessary to increase the 2024 state budget by almost NIS 3.4 billion ($924 million) in order to help fund evacuated civilians and reserve soldiers until the end of the year.
The bill passes 57-51 despite the warnings of both professionals in the Finance Ministry and the opposition, which argues that it fails to curb coalition spending and that its increased expenditures come at the expense of the middle class.
The bill — which will now be forwarded to the Knesset Finance Commission for preparation for the second and third readings necessary for it to become law — increases the state budget to NIS 727.4 billion ($194 billion) while increasing the spending limit to NIS 587.45 billion ($157 billion), an increase of NIS 3.35 billion.
“We are in a fiscal deficit only because of the conduct of the government and the mere opening of the budget a second time is a failure,” declares National Unity chief Benny Gantz. “But there is one goal for increasing the deficit and the cost of harming the citizens of Israel – the survival of the government.”
The 2024 budget was previously amended in March.
The move will lead Israel “to more credit rating downgrades” and the coalition has failed to show fiscal responsibility by closing surplus government ministries and halting coalition funds, he adds.
Credit ratings agency Fitch downgraded Israel’s credit last month, stating that ” the conflict in Gaza could last well into 2025 and there are risks of it broadening to other fronts.”
Fitch expressed concern that increased military spending could have a negative impact on the economy.
Opposition Leader Yair Lapid also slams the legislation, declaring that the budget supplements come at the expense of the working public and that “the only thing that is being cut is the Israeli middle class.”
MK Vladimir Beliak of Lapid’s Yesh Atid party adds his own criticism, saying that Israel’s bonds “today trade at the level of Mexico.”
“This budget is the third budget for 2024 and it is not certain that it will be the last,” he adds. “A lot has changed since the original budget was approved in May 2023, but what hasn’t? The coalition funds, the unnecessary offices and the audacity.”
Pushing back against opposition criticism, Communications Minister Shlomo Karhi argues that the additional funds are being allocated “to give assistance to those who are having a hard time now – the displaced, reservists and hostage families.”
The bill’s passage comes two days after a related bill also needed to amend the budget passed the plenum in its first reading in an 58-52 vote.
