Treasury recommends shutting 10 surplus ministries to cover budget deficits – report

As costs of war with Hamas soar, Finance Ministry also suggests cutting coalition funds by NIS 5 billion and raising taxes

FILE - MKs in the Knesset Finance Committee vote on the supplementary budget to cover the costs of the war with Hamas in Gaza, December 12, 2023. (Noam Moskowitz/Knesset Spokesperson's Department)
FILE - MKs in the Knesset Finance Committee vote on the supplementary budget to cover the costs of the war with Hamas in Gaza, December 12, 2023. (Noam Moskowitz/Knesset Spokesperson's Department)

The Finance Ministry has reportedly recommended closing 10 superfluous government ministries to cover a wartime budget shortfall of NIS 70 billion ($20 billion), alongside a list of other potential measures.

According to a Channel 12 report Sunday, the ministries in the treasury’s crosshairs include:

  • The Settlements and National Missions Ministry, headed by Orit Strock.
  • The Jerusalem and Jewish Tradition Ministry, helmed by Meir Porush.
  • The Intelligence Ministry, headed by Gila Gamliel.
  • The Ministry for the Development of the Negev and the Galilee, headed by Yitzhak Wasserlauf.
  • The Regional Cooperation Ministry, helmed by David Amsalem.
  • The Diaspora Affairs and Social Equality Ministry, led by Amichai Chikli.
  • The Strategic Affairs Ministry, headed by Ron Dermer.
  • The Heritage Ministry, led by Amichai Eliyahu.
  • The Advancement of the Status of Women Ministry, helmed by May Golan.

According to the report, the Finance Ministry has also recommended cutting NIS 5 billion ($1.4 billion) of coalition funds — money going to cover parties’ political demands — nixing subsidies on gasoline, hiking taxes on cigarettes, and further taxing benefits in advanced study scholarships.

If there is no other choice, the treasury could, reportedly, recommend raising the VAT tax attached to virtually all consumer goods, which currently stands at 17%.

FILE – Yesh Atid chairman and Leader of the Opposition MK Yair Lapid speaks out against the budget amendments for the 2023 budget in the Knesset Finance Committee, December 11, 2023 (Noam Moskowitz/Knesset Spokesperson’s Department)

The supplementary budget for 2023 was passed 59-45 in mid-December, to cover the costs of the ongoing fighting with the Hamas and Hezbollah terror groups since October 7, including increased military expenditure and civilian expenses such as accommodations for evacuees from the north and south. It faced opposition from parties on both sides of the aisle because it also allocated funding to some projects not connected to the war effort.

Some NIS 17 billion of the NIS 28.9 billion ($7.85 billion) funds for the war are going toward security costs such as arms procurement and payments for IDF reservists, while NIS 12 billion will finance home front expenses.

Approximately NIS 6.1 billion were diverted to cover the cost of housing evacuees from northern and southern Israel, financial assistance for those injured during the war, schooling arrangements for evacuees and employment incentives.

NIS 1.8 billion are being used to bolster civilian security arrangements inside Israel, including additional funds for the police, prison service, fire service, civilian security squads, emergency equipment for local authorities, and bomb shelters.

Another NIS 1.8 billion were allocated toward boosting the economy, including assistance for agricultural needs, child day care, compensation for cultural institutions, and a “security cushion” for shipping and aviation.

A further one billion was earmarked for bolstering the health system, including mental health services, purchasing medicine, and fortifying hospitals against rocket attacks.

Some of the most controversial coalition funds that were kept in the budget are over NIS 300 million for the Settlements and National Projects Ministry, and the diversion of sizable funds to the ultra-Orthodox education system.

War erupted between Israel and Hamas on October 7, when some 3,000 terrorists burst across the border into Israel from the Gaza Strip by land, air and sea, killing some 1,200 people and seizing over 240 hostages of all ages — mostly civilians.

In response, Israel vowed to eliminate the terror group with a wide-scale military campaign in Gaza, while also massing forces to the north to counter attacks  by the Iran-backed Hezbollah terror group.

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