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Times Of Israel
Times Of Israel
7 Feb 2024


NextImg:Amended wartime budget clears first of three Knesset plenum votes

The Knesset on Wednesday gave initial backing to an amended version of the 2024 state budget to finance the ongoing Israel-Hamas war in Gaza and outlays related to the conflict.

The bill cleared its first reading in a 57-50 vote and will be sent to the Knesset Finance Committee for markups. Once green-lit by the panel, the legislation will return to the Knesset plenum, where it must pass two more readings before becoming law.

The NIS 582 billion ($155 billion) budget, which was approved by the government last month after a preliminary proposal encountered ministerial headwinds, includes money for defense and compensation for those impacted by the war, along with higher allocations for healthcare, police, welfare and education.

Speaking before Wednesday’s vote, Finance Minister Bezalel Smotrich touted the budget as a responsible spending package that will provide the necessary resources for Israel to achieve victory against Hamas.

According to Smotrich, the budget has two main components: a dramatic increase in the defense budget and the budgets for other civilian expenses that are necessary for the maintenance of the war, as well as reductions in the rest of the budgets.

“We submitted a responsible budget that will allow the government to wage the war until victory,” he said, noting that the expenses incurred during the war will not disappear with the end of hostilities.

“Some of the vulnerabilities will accompany us in the foreseeable future and burden the economy. This is a turning point in the Israeli economy that requires the mobilization of the government and all of us as a society,” Smotrich continued.

“This is a crisis. There is a permanent increase that will accompany us in the coming years in the budget including civilian expenses – additional health, mental health, welfare, pensions, victims of hostilities, compensation and more.”

Israeli battle tanks in southern Israel along the border with the Gaza Strip on February 7, 2024, amid the ongoing war between Israel and the Palestinian terror group Hamas. (Jack Guez/AFP)

To pay for the defense spending increase of around NIS 70 billion ($18.6 billion), the budget includes an across-the-board cut of 3 percent from all government ministries with some exceptions. It also slashes around NIS 2.5 billion ($670 million) out of NIS 8 billion in coalition funds — discretionary funds earmarked for pet projects of MKs and ministers, and contains a deficit target of 6.6% of GDP.

Notably, the current plan does not contain any provisions for reducing the number of government departments, despite the Finance Ministry’s recommendation that 10 superfluous ministries — including the Settlements and National Missions Ministry, the Jerusalem and Jewish Tradition Ministry, and the Intelligence Ministry — be closed to cover the wartime shortfall.

While Knesset lawmakers okayed state budgets for 2023 and 2024 — totaling nearly NIS 998 billion ($270 billion) — last May, the outbreak of war in October upended the government’s fiscal plans, forcing legislators to pass a NIS 28.9 billion ($7.85 billion) supplementary budget for 2023 in December in order to cover the costs of the ongoing fighting with Hamas and Hezbollah, as well as civilian expenses, such as accommodation for evacuees from the north and south.

The war with Hamas — which began on October 7 when the terror group led a surprise cross-border onslaught, killing some 1,200 people, the large majority of them civilians, and taking some 240 people hostage — is reportedly costing Israel at least NIS 1 billion ($269 million) a day.