The governing coalition reached agreements with former national security minister and Otzma Yehudit Party chairman MK Itamar Ben-Gvir, according to which his party will abstain on the first budget bill, set to reach the Knesset plenum on Wednesday.
Ben-Gvir agreed to abstain as a “goodwill gesture” over the prime minister’s decisions to fire Shin Bet head Ronen Bar and Attorney-General Gali Baharav-Miara.
The abstention means that the government now has a comfortable majority to pass the bill on Wednesday, the Economics Arrangements Bill.
This is a bill that accompanies the national budget every year, and includes related legal amendments that are necessary for the budget to be carried out in full.
The coalition then intends to pass the budget bill itself at the beginning of next week (likely on Monday, March 24, or early Tuesday morning). However, Ben-Gvir’s support for the budget itself is still not guaranteed.
Ben-Gvir critical of Shin Bet chief and attorney-general
Ben-Gvir has been a fierce critic of both Bar and Baharav-Miara.
His criticism of the attorney-general intensified after she wrote to Netanyahu that he would need to receive legal consultation in order to reappoint Ben-Gvir as national security minister due to a series of alleged improper interventions into operational police work.
The Knesset Finance Committee continued a series of marathon debates on Monday to approve all parts of the budget proposal itself. Monday’s Knesset plenary was shortened to two hours in order to enable the finance committee to resume voting.
Opposition MKs in the Finance Committee led by Yesh Atid MK Vladimir Beliak demanded on Sunday to hold new debates on dozens of clauses in the 2025 budget bill that have already been approved.
The demand came following reports on Saturday that the government intends to insert a new across-the-board cut (known as a “flat” cut) in the 2025 budget proposal, due to a decrease in expected national income as a result of certain measures that were not approved by the committee.
As of press time on Monday, the opposition MKs had yet to receive a response from Finance Committee legal adviser Shlomit Erlich.
The flat cut is set to amount to just over NIS three billion ($821 million) – and will mean a cut of 4.3% from government ministries’ budgets. The cuts are expected to impact the budgets of all ministries, including Defense, National Security, Education, Health, and Welfare, according to a draft of the government proposal on the cut.
The widespread cuts are necessary in order to keep Israel’s deficit from ballooning if not all planned tax measures are enacted. Following new tax measures that did take effect at the beginning of the year, Israel’s deficit shrank to 5.3% of GDP, according to a first estimate by the Finance Ministry released last week, but this is still well above the ceiling set out in the 2025 budget of 4.9% of GDP.
The incomplete tax measures behind the need for the additional cuts include freezing the planned increase of the threshold for reporting on income from rent, mandatory reporting on rent income, enforcing cash laws on loans at financial institutions including gemachim (communal lending funds), automatic tax reporting for Airbnbs, and twelve more steps that were planned to help fund the 2025 budget.