A bill to increase the National Insurance Institution tax (Bituah Leumi) passed a vote in the Knesset Welfare Committee on Wednesday morning, despite an attempt by National Security Minister MK Itamar Ben-Gvir to block it.
The bill was part of the annual Economic Arrangements Bill, which accompanies the state budget and groups together all legislative amendments necessary to pass the budget. The Economic Arrangements Bill is split up into a number of chapters that are prepared by different Knesset committees.
The chapter in the Knesset Welfare Committee included two provisions – raising the National Insurance Institution tax and freezing the salaries of workers in the public sector in 2025. These provisions are crucial for the coalition since they are expected to create approximately NIS 5 billion in national income in 2025.
The bill’s advancement was a blow to Ben-Gvir after he failed last week to block a different budget-related bill. Ben-Gvir has directed his party to oppose the 2025 national budget because he is not satisfied with his ministry’s budget, which he said will negatively affect police work and thus would harm internal security.
The Knesset Welfare Committee has 15 members, eight who belong to the coalition and seven to the opposition. Otzma Yehudit has one member on the committee, and therefore it was able to stall the bill for the past two weeks. However, on Wednesday Otzma Yehudit MK Almog Cohen abstained from a final reservation to the bill.
The reservation did not pass, thus paving the way for the bill to return to the Knesset plenum for its second and third reading, after which it will become law.
Conflict in committee
Committee chairman MK Yisrael Eichler announced on Tuesday evening that voting on the bill would resume on Wednesday morning. Otzma Yehudit immediately attempted to remove Cohen’s membership in the committee and replace him with a different party member. However, Coalition Whip MK Ofir Katz (Likud) managed to delay the move, leading to Cohen’s abstention on Wednesday morning.
Cohen also broke with his party last week when he supported a different budget-related tax bill and ended up being the deciding vote after it passed, 59-58. The bill that passed last week, known as the “Trapped Profits Bill,” is expected to create over NIS 9 billion in national income in 2025.
Had it not passed, the coalition would have needed to find an alternate source of income or insert further cuts in the 2025 budget proposal, which is making its way through the legislative process.
After Cohen’s abstention in the Welfare Committee, Otzma Yehudit removed him from a number of its WhatsApp groups. Cohen has had a tense relationship with Ben-Gvir for months, but Wednesday’s abstention, coupled with Cohen’s vote last week, indicated the deep rift between Cohen and his party leader.
Cohen denied that he had received promises from the coalition in exchange for his vote and has argued that he did not agree with Ben-Gvir’s strategy of threatening the state budget and destabilizing the coalition.