Coalition funds cut 70%? Depends how you look at it

National Unity party leader Benny Gantz, who joined the government of Benjamin Netanyahu shortly after the outbreak of the war with Hamas, has threatened that his party’s ministers will not vote for the adjusted 2023 budget in the government this evening, because of the refusal of Minister of Finance Bezalel Smotrich to cut all funds allocated to coalition parties that are yet unspent.

The government is due to convene at 18:30 today (Monday) to approve an adjusted budget for the end of the year, in the light of the expenditure Israel is incurring in the war in the Gaza Strip. In a letter to Prime Minister Benjamin Netanyahu, Gantz demanded that the decision should be postponed or that coalition funds should be wholly cut. Otherwise, he wrote, "the National Unity Party will vote against the budget and will consider its future steps."

The bone of contention is the money allocated in the budget to the parties in the coalition for spending on their own projects and constituents. The money is mainly earmarked for haredi educational NGOs and West Bank settlements. Smotrich proposed cutting NIS 1.6 billion from the coalition funds in the 2023 budget. The Budgets Division in Smotrich’s Ministry of Finance proposed a NIS 2.5 billion cut in the 2023 budget. Up to now, Smotrich has refrained from commenting on the fate of the coalition funds in the 2024 budget.

In his response to Gantz yesterday, Netanyahu in effect rejected his demands. "Tomorrow, we will bring before the government an unprecedented budget of NIS 30 billion for one and a half months that answers all the needs of the war," he wrote.

On the coalition funds, Netanyahu wrote: "A cut of over 70% has already been made in the coalition funds, NIS 1.6 billion, and what remains is earmarked for civilian purposes, such a teachers’ salaries, and not for any political use. The political dispute concerns 1% of the total budget."

Does the cut really amount to 70%? Well, not exactly. In relation to the coalition funds for 2023, the figure is accurate, but the picture is more complicated.

Altogether, in the 2023-2024 budget, NIS 10.5 billion are available for transfer from coalition parties to other purposes. Smotrich has cut NIS 1.6 billion of this amount in order to deal with the consequences of the war, which amounts to just 15%. If the money already spent by the political parties is taken into account, the cut amounts to a token 11% only.

How will the standoff end? The National Unity party will probably vote against the budget, but since there is a majority in the government without it, the revised budget will be approved, and battle will be rejoined in the votes in the Knesset.

Published by Globes, Israel business news - en.globes.co.il - on November 27, 2023.

Coalition funds cut 70%? Depends how you look at it

In response to Benny Gantz's threat to vote against the revised 2023 budget, Benjamin Netanyahu claims that the dispute is over just 1% of the budget total.