The Knesset Finance Committee began on Monday to debate the government proposal for a renewed 2024 budget, with Finance Minister Bezalel Smotrich in attendance.
The original 2024 budget, which passed in May 2023, became irrelevant due to an increase in government spending and a decrease in income in the wake of Israel’s war against Hamas, and Israeli law required that the government bring a renewed budget. The renewed budget passed its first reading on the Knesset floor on Wednesday, and the finance committee’s meeting kicked off a series of debates and then voting ahead of the budget’s return to final voting on the Knesset.
Smotrich presented the budget and said that it was based on three principles: providing all of Israel’s war needs; cutting into budgets that are not necessary for the war needs; and the third was to try to balance the needs of all sectors to avoid divisive feuding.
“We are cutting [budgets] but not slaughtering any sacred cows. There will be those who shout over the Bima [Theater], and those who shout about funds for settlements. There is no budget cut in unimportant things – everything is important, but there are things that are more important, and these require difficult cuts which every sector and ministry feel. I tried for it to be balanced,” Smotrich said.
Committee members, mostly from the opposition, voiced concerns over the budget, especially in the wake of the credit rating agency Moody’s decision on Friday to lower Israel’s rating for the first time ever, and to update Israel’s economic outlook to “negative.”
Calls for Smotrich to resign
The leader of the opposition in the committee, Yesh Atid MK Vladimir Beliak, said that Smotrich should resign, saying that he “could not trust” the finance minister’s policy.
“It was you [who] received a growing economy and within one year turned it into an economy in deficit, you who harmed Israel’s hi-tech industry, and you who said in July 2023 that Moody’s warnings were a ‘temporary response,’ and here the dust has settled and for the first time Israel’s credit rating has fallen, and it is all on your watch,” Beliak said.
Beliak noted that in December Smotrich pledged that the country’s budget deficit would not dip below 5%, but the new budget has it falling to 6.6% by the end of 2024.
“On the 129th day of the war, we no longer have the luxury to continue with you in your job, you failed, you need to resign, and then maybe, in true unity, to take Israel out of its current situation,” Beliak said.
The following speakers criticized different aspects of the budget. These included the fact that the budget did not heed a proposal by finance ministry specialists to shut down six government ministries considered unessential to the war; that the budget still includes billions of shekels of politically-based “coalition funds,” a large portion of which is earmarked for haredi schools that do not teach core secular studies; the fact that haredi men will continue to receive an exemption from IDF service; and more.
