After harsh criticism of the coalition funds transferred in the 2023 budget to the ultra-Orthodox parties and Religious Zionism, the Shas and Torah Judaism parties are demanding that in the 2024 budget, all the funds earmarked for the ultra-Orthodox parties be at the base of the budget.
The significance of the demand is that the additional budget for Haredi education, Shas food stamps, and more, will be included in the budget book and may be binding on future governments for years to come.
Deputy Transportation Minister Uri Maklev (Torah Judaism) told Israel Hayom: "The goal is that there will be no coalition funds. Government services and actions should be at the base of the budget and not in coalition funds." Maklev added that as far as the ultra-Orthodox factions are concerned: "There are parts of coalition funds that are not luxuries and should be the basis of the budget."
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Last week, the Knesset approved the state budget for 2023, which underwent changes in light of the Iron Sword War. The budget was approved by a vote of 59 in favor to 45 against. Yisrael Beiteinu Party Chairman Avigdor Lieberman said before the vote that "this budget is the latest robbery, the looting of the coalition on the way to the opposition. We will correct all the failures both in security and in the economy. You are leading us to an economic crash. I hope we will replace you very soon."
Opposition Leader MK Yair Lapid (Yesh Atid) said in the Knesset plenum that "the budget that is being laid here today is the budget of those who have learned nothing and understood nothing. Those who do not understand that after October 7 will not forgive them. There will be no forgiveness for this moment, there will be no forgiveness. You had one chance, one budget to show that you understood, that you were beginning to repair, beginning to heal the wounds. Instead, you put in place a budget that says, 'We don't care, we don't care, we don't see you and we don't hear you.'"
The government must submit the updated state budget for 2024 to the Knesset by January 20, 2024. The budget being formulated by the Ministry of Finance will include difficult decrees that will harm the middle class, despite the opposition of Finance Minister Bezalel Smotrich – and despite the war.
These include raising taxes, income tax on rent, freezing child credit points, freezing the public transportation reform, tax on orders from shopping sites abroad, the Netflix tax, and canceling benefits for those who complete an academic degree.
The Ministry of Finance is demanding streamlining in the structure of the government and reducing duplication, focusing expenditures, and reducing salary and pension expenses. In addition, almost as usual, finance officials are asking for across-the-board cuts in government spending.
The Ministry of Finance is planning additional drastic measures, such as raising one percent in income tax and raising one percent in VAT. According to Finance Ministry officials, these two items together will bring NIS 11 billion into the state coffers. Another particularly painful clause is the cancellation of the tax exemption on rent.
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