The government approved the state budget for 2023-2024 on Friday, after all night discussions in which some of the matters in dispute remained unresolved. The budget for 2023 will total NIS 484 billion, and for 2024 it will total NIS 514 billion. The budget is expected to undergo significant changes in the process of passing it though the Knesset to bridge gaps between the Ministry of Finance and minsters’ demands.
After the government gave its approval to the budget, Minister of Finance Bezalel Smotrich said, "In the proposed budget we kept in view the large burden on the shoulders of the citizens of Israel, and we worked hard to combat the cost of living which makes life hard for every citizen in Israel. We submitted a restrained and responsible budget and kept within the budget framework that we set for ourselves, as required at this time in the stormy waters of the global economy.
"The two-year budget is biased towards growth and infrastructures, and with God’s aid this will help to maintain the development of the State of Israel and the stability of the Israeli economy."
Among those who had to compromise on their demands and promises was Prime Minister Benjamin Netanyahu, who had made free pre-school education for 0-3 year-olds an election pledge, one that he repeated before the budget discussion. What remains in the budget is benefits for infants aged 2-3, and the government subsidy for parents looks as though it will only be partial.
Parents of children aged 12-18 will receive an additional tax credit point.
It is not clear what has happened to Smotrich’s plans to help with the cost of living by dealing with the concentration in the food market, The reform, which was meant to be one of the most prominent provisions of the Economic Arrangements Bill that accompanies the budget and was meant to curb the power of exclusive food importers has disappeared from Smotrich’s recent announcements.
Minister of National Security Itamar Ben-Gvir objected to the proposed budget for his ministry almost until the last moment. He demanded a NIS 14 billion addition to the budget. The Ministry of Finance agreed to NIS 5 billion, and eventually compromised on NIS 9 billion. Ben-Gvir demanded the addition mainly for increases in pay for the police.
One minister left unhappy was Minister of Tourism Haim Katz. The Ministry of Finance plans to abolish the exemption from VAT for foreign tourists. Katz boycotted the discussion, saying that he would not attend his ministry’s funeral.
The budget and Economic Arrangements Bill include investment in green energy, electric transport, and removal of obstacles to infrastructure projects.
Published by Globes, Israel business news - en.globes.co.il - on February 26, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.