Video: The Knesset Returns: The Budget, the Recruitment Law, and the Future of the Legal Reform.Yaki Adamker in the Knesset 01.05.23 (Yaki Adamker)
On Sunday morning, the government will approve the distribution of coalition funds totaling NIS 13.6 billion for 2024-2023. According to the proposal, the two-year state budget approved at the end of the month will include NIS 5.7 billion in 2023 and NIS 7.9 billion in 2024, which will be distributed mainly to sectoral needs of the ultra-Orthodox, settlers and national religious, such as increasing the budget for yeshivas, support for ultra-Orthodox and state religious education, and budgets for religious services, ancestral graves, the conversion system, the establishment of MK Avi Maoz's Jewish Identity Authority, and the Shas food stamp program. In accordance with the commitments that Prime Minister Benjamin Netanyahu made to his partners in the coalition negotiations that preceded the formation of the government.
The final proposal submitted to the government for approval increased by about half a billion shekels compared to the initial draft prepared by the Ministry of Finance, in light of the demand of the ultra-Orthodox factions to keep the promises of the coalition agreements and increase the sums for haredi educational institutions and scholarships for yeshiva students by hundreds of millions of shekels. The proposal is strongly opposed by the Ministry of Finance, where they warn that the distribution of coalition funds could harm Haredi employment, lead to future tax increases, and harm GDP and economic growth.
Approves the division contrary to the position of economists. Netanyahu (Photo: Flash 90, Jonathan Zindel)
Ahead of the government discussion, the head of the Budget Department in the Ministry of Finance, Yogev Gross, delivered a severe and unusual opinion to the ministers, warning of the future heavy economic consequences of the distribution of coalition funds, especially regarding budgets for the ultra-Orthodox education system and yeshivas and the Shas food card program. According to the Budget Department, the distribution of these coalition funds will increase the haredi sector's incentive for non-participation in employment, lower the rate of participation in employment. and abolish the budgetary preference of state education compared to ultra-Orthodox education networks. "Even before the implementation of the government decision and its expected negative effects on the economy, without a change in the employment rate among Haredi men, the cumulative loss of GDP by 2060 is expected to reach NIS 2065.6 trillion in 71. In order to maintain the current level of government services, Israeli governments will have to raise direct taxes by 16 percent," the document said.
Usually, budgetary commitments in coalition negotiations are accompanied by consultation with the Ministry of Finance, but unusually, Prime Minister Benjamin Netanyahu did not consult or update the Budget Department with the promises he distributed to the coalition partners, and they were not part of the process. Unusually, the distribution of coalition funds was also not brought to the cabinet for approval together with the budget proposal at the end of February, and is only being brought now, two weeks before the deadline for final approval of the budget in its second and third readings in the Knesset. Indeed, the professional echelon in the Ministry of Finance opposes the manner in which coalition funds are distributed. In addition to the Budget Department, the Chief Economist warned last week that government decisions to increase the Haredi education budget, the yeshiva budget, and the food stamp program are expected to lead to a decline in the earning potential of Haredi men and their integration into the labor market, and may harm the growth of the Israeli economy. The Shas food distribution plan also raises legal opposition in light of the criteria for distributing the benefit, which was detailed in an opinion by Finance Ministry Attorney General Assi Messing that was forwarded to ministers.
According to the distribution of coalition funds, among other things, close to NIS 4 billion will be transferred to the yeshiva budget over the next two years, NIS 1.18 billion to the salaries of teaching staff in Haredi educational institutions, and half a billion NIS will be transferred to the Ministry of Jerusalem and Tradition of Knesset member Meir Frosh. More than 700 million shekels will be transferred to Minister Orit Strock's Ministry of Settlement, 450 million shekels will be transferred to the young settlement, 285 million shekels to Maoz and the Jewish Identity Authority that he demanded to be established in the Prime Minister's Office. National Security Minister Itamar Ben-Gvir will receive NIS 1.3 billion to strengthen national security, out of the NIS 9 billion he claimed he was promised as a budget supplement.
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