image Photo: Flash90

Israeli budget approved after 3.5-year stalemate

Approval of the 2022 national budget bolsters the stability and fiscal responsibility of the diverse, cross-partisan coalition government led by Prime Minister Naftali Bennett.

By Erin Viner

The vote of 59 in favor to 56 against follows an intense, 3-day marathon debate over the government’s state spending plan that began last Tuesday morning.

The budget, officially known as The Arrangements Law, had to pass 3 parliamentary readings and garner a simple 61 majority of the 120 Members of Knesset (MKs), in accordance with Israeli law.

During administration of former Prime Minister Benjamin Netanyahu, Israeli lawmakers had failed to agree on a state budget since 2018.  The government was forced to operate on had a pro-rated version of the 2019 budget, which has been a major impediment to long-term economic planning.

“We’ve put Israel back on track,” declared a triumphant Prime Minister Bennett on Twitter.

Foreign Minister and Alternate Premier Yair Lapid hailed the victory, saying that members of his government “took responsibility, we kept our promise.”

The $146 billion (€126 billion) spending package includes 13 significant economic reforms, which “express the vision that underlies the entire economic plan of the State of Israel – for without a vision, a nation loses restraint,” said Finance Minister Avigdor Liberman, citing the biblical Book of Proverbs. “After three and a half years we have a budget! After months of hard work, we completed the task together and brought a social and responsible budget to all citizens,” Liberman later posted on Twitter, adding, “It is allowed to get excited, it is desirable to smile, we promised and we delivered – governmental stability and a growing economy!”

The new reforms range from the reduction of regulations and bureaucracy on imports estimated to save Israeli consumers some₪ 8 billion shekels ($2,568,440,880 or € 2,228,943,240) each year, to increased transparency in the banking sector, improvement of transportation infrastructure including the construction of a new train through central Israel, a₪ 30 billion shekel ($9,633,420,000 or € 8,354,535,327) allocation over 5 years to improve the Arab sector, gradual rise in the age of retirement for women from 62 to 65, increased pension payments to senior citizens, new efforts to curb soaring real estate costs, caps of cash usage to prevent money laundering and tax evasion, promotion of green energy projects, and dismantlement of the monopoly currently held by the Chief Rabbinate on the issuance of kosher certification to allow for competition by private companies.

Failure to pass the biennial budget would have automatically dissolved the Knesset and mandated the holding of another national election.