Legislation must now clear all Knesset readings by Nov. 4

Netanyahu assails ‘atrocious’ state budget; Lapid predicts it’ll pass in Knesset

Opposition leader claims budget ‘full of economic cuts, tax and price increases,’ vows to block it; Yesh Atid chief says government may seek support of parties outside coalition

Raoul Wootliff is the The Times of Israel's political correspondent.

Opposition Leader Benjamin Netanyahu speaks during a Likud faction meeting at the Knesset on July 26, 2021. (Yonatan Sindel/Flash90)
Opposition Leader Benjamin Netanyahu speaks during a Likud faction meeting at the Knesset on July 26, 2021. (Yonatan Sindel/Flash90)

After the cabinet voted to approve a national budget for the first time in three years, Opposition Leader Benjamin Netanyahu assailed the spending plan Monday, saying it was the worst he had ever seen and vowing to block its passage in the Knesset.

“I have passed many budgets in my time but I have never seen such an atrocious budget before,” Netanyahu told reporters at the opening of his Likud party faction meeting in the Knesset.

“It is full of economic cuts, tax and price increases. Instead of lowering taxes and making it easier for Israeli citizens, they are raising taxes and prices and harming Israeli citizens,” he claimed.

“Why do Israeli citizens need to pay the price so the government can pay NIS 53 billion to MK Mansour Abbas?” the former prime minister added, referring to budgets for the Arab Israeli community promised to the head of the coalition’s Ra’am party.

Netanyahu said he would “leave no stone unturned” in his bid to block to budget from passing in the Knesset, a move that would automatically bring down the government and force new elections.

The two-year state budget allocates $187 billion for 2021 and $173 billion for 2022, and includes sweeping reforms of the kashrut establishment and the agriculture industry, steep taxes on disposable plasticware and sugary drinks, and considerable changes to import policies.

Other major reforms include the gradual raising of the retirement age for women to 65 over the course of 11 years, at a rate of four months a year for three years, and three months a year for a further eight years.

Shas party chair Aryeh Deri leads a faction meeting at the Knesset on August 2, 2021. (Yonatan Sindel/Flash90)

Having been approved by the cabinet, the complex legislation must now pass through committee stages and three readings in the Knesset plenum by a November 4 deadline — in a key challenge for the coalition, which holds a narrow parliamentary majority. If it does not pass by then, the Knesset would automatically dissolve and elections would follow.

The budget will require all the votes of the wafer-thin coalition to pass, with the opposition of a single lawmaker able to bring it down. The diverse composition of the new government led by Prime Minister Naftali Bennett — made up of right-wing, centrist and left-wing parties — complicates the effort.

Shas chair Aryeh Deri also vowed to oppose what he called “the white budget,” telling his party’s faction meeting on Monday that it would harm the weakest segments of Israeli society.

“Today Bennett, [Foreign Minister Yair] Lapid and [Finance Minister Avigdor] Liberman’s pleasure-boat government approved the ‘white’ budget,” he said. “Liberman walks around the middle of the night in the government corridors with a glass of white wine and crushes the weakest people in society. This government is of the strong versus the weak.”

Foreign Minister Yair Lapid speaks during a Yesh Atid faction meeting at the Knesset on August 2, 2021. (Yonatan Sindel/Flash90)

United Torah Judaism MK Yaakov Asher also claimed the budget ignored Israel’s weakest populations and will raise taxes on critical segments of society in need of assistance.

“The finance minister promised not to raise taxes. If he were to institute a tax on vodka, I would have said, ‘This is something that takes courage,'” Asher told Radio 103 FM, in a reference to Liberman’s roots in the former Soviet Union.

At the Yesh Atid faction meeting, however, Lapid cheered the cabinet’s approval of a budget and predicted it would win Knesset backing.

“For three years the State of Israel was without a budget, all because of politics,” he said.

Lapid, who also serves as alternate prime minister, said he would reach out to “all factions” to discuss the budget, suggesting the coalition would seek additional support from opposition parties.

Lapid echoed the words of Bennett, who welcomed the advancing of the budget earlier Monday, saying, “After three years of stagnation, Israel is back to work.”

“After years of neglect, this morning we have produced the most daring, most competition-focused budget, the most helpful to the weaker segments [of society], and the most concerned about the future of our children,” Bennett said following a marathon all-night cabinet meeting.

Israel’s last approved state budget was for 2019, before the country became embroiled in a two-year political gridlock. That budget was passed in March 2018.

Prime Minister Naftali Bennett (C) and Finance Minister Avigdor Liberman (L) at a cabinet meeting to approve the state budget, August 2, 2021 (GPO/Amos Ben Gershom)

In the previous government, then-prime minister Netanyahu refused to pass a budget — which allowed him to call elections without then-coalition partner Defense Minister Benny Gantz immediately becoming transitional prime minister under the terms of their rotation deal.

Finance Minister Liberman said Monday morning that the planned reforms would bring tangible change to the lives of many.

“The reforms we have approved focus primarily on lowering the cost of living. We have invested huge amounts of funding in infrastructure, transportation and real estate, and we have implemented significant reforms that will reduce bureaucracy, making it easier for everyone in our day-to-day business or private life,” Liberman said in a statement.

Liberman has said he believes the budget will pass because even most of the opposition does not want a fresh round of elections. Sources in the government have been talking to members of the opposition’s Joint List to negotiate support from outside the coalition for the budget, Kan reported Sunday.

Times of Israel staff contributed to this report.

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