Knesset Passes Budget


As one of the most tumultuous — and many ways disgraceful — Knesset sessions in Israeli history drew to a close on Wednesday, the final figures of the 2013-14 stage budget emerged.

While it deals a serious blow to the chareidi community, some of the decrees were either softened or eliminated, including the plan to cut funding for foreign yeshivah students.

The budget includes steep cuts in the defense budget and to government services, in addition to increases in income tax and VAT. Income tax will be raised progressively, with those earning up NIS 14,000 a month paying 1% more, and those earning up to NIS 22,000 seeing an increase of 1.4%.

Higher wage-earners will pay 2% more.

Corporate tax was also increased.

The budget for yeshivos was cut by NIS 260 million, or 40%, from NIS 909 million to NIS 649 million for 2013, with an additional NIS 227 million to be cut in 2014. That means that the budget is being cut by more than 50% in two years. It should be noted that this budget includes not only chareidi yeshivos, but those of the national-religious sector as well.

During the Finance Committee budget deliberations, a group of MKs from Jewish Home threatened to withdraw their support of the budget should some of the cuts not be restored, until Jewish Home leader Naftali Bennett silenced the critics in a closed-door faction meeting, after which all party MKs supported the budget.

It was rumored in the Knesset — and reported last week in Haaretz — that, in response to pressure from Bennett and Finance Committee chairman Nissan Slomiansky, a way will be found to return NIS 150 million of the 2013 cut and a further sum to soften the 2014 cut, though the sums will not appear in the budget.

However, after the budget was passed, Finance Minister Yair Lapid told Israel Radio that none of the cuts would be restored.

Plans to cut the budget for  foreign yeshivah students were shelved and the cancellation of the Nahari Law, which provided maintenance and other services to “recognized but not official” institutions, was softened. According to the law that passed, the decision as to whether to fund these services will be left to the discretion of the individual municipalities.

The requirement that both parents work full time in order to receive child care subsidies will be introduced gradually.

A similar requirement was to be introduced in order to get discounts on arnonah (property tax) and various housing assistance programs. In the end, the arnonah requirement was pulled from the Economic Arrangements Bill, and will be dealt with in a separate bill to be introduced by the government.

It was also agreed that those housing programs being offered for the chareidi and Arab sector will not include such a requirement. It was stipulated, though, that the housing assistance for these two groups should not exceed 30% of the total amount of housing units offered.

However, if the number of housing units offered is significantly increased, than the actual number of apartments available for chareidim at reduced cost could be higher than in previous years.

The Finance Ministry had sought to reduce all child allocation payments to NIS 140 per child. The final budget has a somewhat smaller cut for those children born before June 2003, because they receive a larger allocation now. In order to soften the blow to those families, the cut was minimized slightly.

The Education Ministry had intended to cancel a clause giving Chinuch Atzmai and Shas’ Maayan Hachinuch Hatorani networks identical funding with state-religious schools (though, in fact, they get 75%). This was not passed due to legal considerations. The ministry is now working on setting up an alternate framework for “national-chareidi” schools, after which they will introduce a bill cutting the networks’ funding.

Speaking in the Knesset, Lapid boasted that “first we took from the yeshivos and from the rich.” From the rich he took a 2% income tax hike, and from the yeshivos, he effected a 52% cut in their budgets.

He also admitted that the motivation behind the cut in child allowances was not an economic decision, but rather an ideological one. “The cut in child care allowances was not a fiscal decision, but rather an ethical one,” he declared.