In the video: Report by Yaki Adamker, our correspondent in the Knesset (Yaki Adamker)
Prime Minister Benjamin Netanyahu and senior members of his coalition celebrated this morning, as is tradition, with selfies and jubilant applause at the approval of the state budget for 2023-2024. In a rare move, Netanyahu managed to deviate from his custom, meet deadlines and pass the budget almost a week before the last minute, without delays and with zero mishaps.
"This is the dawn of a new day," he declared with a smile at the end of the vote, and Finance Minister Bezalel Smotrich congratulated the government with "Good morning with a good budget, which will give us tools to work." The approval of the budget does indeed give Netanyahu's sixth government a horizon of political stability in the near term, but there is a huge chasm between the coalition's celebrations and economists' harsh warnings about its long-term implications for the economy and the country.
As the prophet Isaiah said, "Eat and drink because tomorrow we will die," the budget generously and greedily distributes to the coalition partners the funds and resources Netanyahu promised them: more than NIS 14 billion of coalition funds have been added to the budget base of government ministries – the price of the arduous negotiations he conducted to form a full-fledged right-wing government six months ago. From allowances to the rabbis, settlement nuclei of the settlers, huge budgets to strengthen Jewish identity, commemorative projects for Rabbi Druckman and Gandhi, and what not, Netanyahu's partners demanded – and received – everything that came to hand, knowing full well that a prime minister accused of criminal offenses had no other option than to devote himself to his allies.
The same premise has also enabled them in recent weeks to demand that he fulfill almost every comma in the agreements he signed and continue the celebration – as if there is no tomorrow.
The budget gives it stability, for now. Netanyahu in the Knesset, tonight (Photo: Knesset Spokesperson, Noam Moshkovitz)
The budget fulfills its political purpose well – securing Netanyahu's place in power – but it has little, if any, to do with what's good for Israel's economy. From the outset, in an unprecedented manner, the coalition agreements were formulated without any involvement or consultation with the Budget Department in the Ministry of Finance, which would define the commitments made to the partnership with the economic data.
At the end of February, when the budget reached the government, it was approved hastily and without a thorough discussion of the ministries' urgent priorities and needs. On the coalition funds, on the other hand, which joined the budget only last week, Netanyahu's partners conducted arduous negotiations, completely ignoring warnings from Finance Ministry professionals about their economic consequences. Since the agreements were signed last November, the economic crisis has worsened, inflation is soaring and interest rates are galloping, there has been a decline in GDP and state tax revenues, and the legal revolution has cast a heavy cloud of uncertainty on investments in Israel – all these figures have been laid before the government in recent weeks and months – but the coalition partners have changed almost nothing in their celebration of spending, which will somehow end up in the taxpayer's pocket.
However, more than any excessive sectoral spending, breaching frameworks or increased deficits, the Ministry of Finance is concerned about the future serious damage caused by the enormous drums given to the ultra-Orthodox: doubling the budgets of yeshivas and comparing the budget of informal Haredi education to state education. Budget Department head Yogev Gradus and Chief Economist Shira Greenberg have both published harsh opinions warning that huge budgets for the haredi sector – without requiring core education – will deepen education gaps and harm the integration and earning potential of haredi men into the labor market, educators warn that this is the destruction and dismantling of state education.
Instead of encouraging young Haredim to study and go out to work and integrate and contribute to the economy and the economy, coalition funds are incentivized exactly the opposite, and there is a sweeping economic-professional consensus that these are extreme and destructive moves for the education system and the economy, to the point of a historic cry for generations to come. But the voices of the education minister, the finance minister and the prime minister, who boasts the title of "Mr. Economy," fell silent into the here and now celebration.
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The coalition has no intention of giving up on the legal revolution. Demonstration in Haifa, Saturday (Photo: Yoav Etiel, Omri Rosenberg)
And sometimes, so we sing, the celebration is also over. After the budget is approved, Netanyahu's partners can no longer threaten, blackmail, or undermine his seat, and ostensibly a full-fledged right-wing government has at least a year and a half of stability. However, not only are the government's budget celebrations expected to shatter the reality of the high cost of living and rampant price increases, but the coalition's quiet is far from guaranteed.
Netanyahu managed to delay his promise to the ultra-Orthodox to pass the draft law until the budget, but the Supreme Court's July deadline ensures that a recruitment crisis will come, and the periodic crises with Otzma Yehudit Chairman Itamar Ben-Gvir will probably continue to disrupt the coalition's work and will be an integral part of his daily routine.
After the budget, the legal revolution will also return to the agenda, as Netanyahu confirmed in his voice this morning when he told a Channel 14 reporter: "Of course the reform will pass, but they are still trying to reach understandings." The prime minister is counting on the dialogue at the president's residence, and wants it to continue for at least a few more months so that he can rehabilitate his political and strategic status, but does not take it off the table completely so as not to annoy the base too much. But as talks continue to bog down, pressure from coalition reform supporters to advance unilateral moves is likely to intensify and drag him back into the legal quagmire that has frozen.
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