The Knesset Finance Committee is expected to authorize a NIS 500 million cut to the state budget today. The money cut from all government ministries will most be allocated to the implementation of coalition agreements with the haredi and religious political parties.
The committee’s approval will put into force across-the-board cuts that the government has announced in the past few months. The money for the coalition parties will partly go towards government support of yeshivas and other Torah-study institutions. Not all of it, however, will be for sectoral needs, with some of the money to be transferred to the education system.
When the government was formed, the coalition agreements specified the distribution of NIS 12.5 billion for the use of coalition parties in the 2023-2024 state budget. On the night that the budget was passed, however, coalition parties managed to extract a commitment to a further NIS 1 billion for their use, and later pressed for another NIS 150 million. These excess amounts compelled the Ministry of Finance to announce spending cuts to finance the various demands.
There are reserves totaling about NIS 1 billion in ministerial budgets for the current year, against various risks. The main risk was that JNF-KKL would not transfer a disputed NIS 1.5 billion to the state. In the end, that money was received, but instead of it being released to the ministries as planned, it was decided to use it for coalition party purposes.
Today’s approval in the Finance Committee will use up about half the money in reserve. The remainder will mainly go to financing a decision by the government in June to award a special NIS 300 million budget to the city of Ashkelon. A further sum, of NIS 40 million, is earmarked for aid to refugees from Ukraine who are not eligible to immigrate to Israel under the Law of Return.
Published by Globes, Israel business news - en.globes.co.il - on September 12, 2023.
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