State Budget Passes in Knesset, 906.8 Billion Shekels Over Two Years

Prime Minister Binyamin Netanyahu (R) and Finance Minister Moshe Kahlon had reason to celebrate on Wednesday night as the Knesset passed the 2017-2018 after months of wrangling. (Yonatan Sindel/Flash90)

The two-year state budget for 2017-2018 became law on Wednesday night as the Knesset voted to approve the 906.8 billion framework with a 2.9 percent deficit target.

For Finance Minister Moshe Kahlon it was a personal victory. He noted that many doubted the coalition could get it passed, and that he was proud to prove them wrong and that the economy is “strong, stable and growing.”

Kahlon said that even though taxes were cut, the budget still adds to “social” ministries, such as Labor and Social Services, Health and Education.

“The budget we are authorizing today is social and colorblind. It helps all populations,” he declared.

Opposition leader Isaac Herzog (Zionist Union) disagreed: “This budget…contains no good news for the people of Israel and totally misses the mark,” he said.

“This is a hopeless budget with no solutions for Israelis’ daily economic problems. Not for the housing crisis from which hundreds of thousands of young couples suffer, not for the farmers that the government harms non-stop, not for small and medium businesses that aren’t able to survive and which close one after the other, not for single mothers… not for Holocaust survivors… not for local authorities… not for anyone, except for those who are close to Netanyahu and his partners,” Herzog said.

The bill called for budget cuts across all ministries amounting to 3.3 billion shekels per year. The money saved thereby will be earmarked for various expenditures: the evacuation and post-evacuation arrangements for the Amona outpost; the cost of keeping the Israeli Broadcasting Authority on air longer than originally planned; and Kahlon’s Savings Plan for Every Child, which provides for monthly deposits of 50 shekels into a savings account for each child under age 18, to be withdrawn by the child upon reaching the age of 18 or 21, which alone will cost 2.65 billion over the next two years.

The Economic Arrangements Bill, an important addendum to the main budget, was expected to gain passage later on Wednesday night.

It contained a number of items that had been fought over for months, including: a reduction of tax on hi-tech companies and traditional industry companies from 16 percent to 12 percent for those in the central region, and from 9 to 7.5 for those in the periphery; the controversial “third apartment tax”; grants to municipalities with a new immigrant population of 10 percent or more; and money for any municipality with 500 olim who are socioeconomically disadvantaged.

Along with the bigger issues voted on after a four-hour debate, there were smaller ones that never came to a vote.

For instance, when coalition chairman David Bitan (Likud) distributed candy to help keep the lawmakers focused and awake during the grueling session, Knesset Speaker Yuli Edelstein scolded him for breaking the rule against bringing food and drink into the plenum.

But MK Shelly Yacimovich (Zionist Camp) pointed out that Prime Minister Binyamin Netanyahu had broken the rule and nobody said anything about it.