Political Chaos Will Delay Israel’s 2023 Budget

YERUSHALAYIM (Reuters) – Growing political chaos has pushed off a cabinet vote on Israel’s 2023 state budget to at least August, a senior Finance Ministry source said on Tuesday.

The budget is largely ready and had been slated for a June 23 cabinet vote with a plan for final Knesset approval in November, Finance Minster Avigdor Lieberman told Reuters last month.

But an already fragile government moved closer to collapse after Nir Orbach, a lawmaker from Prime Minister Naftali Bennett’s right-wing Yamina party, said on Monday he was “no longer part” of the ruling coalition.

“Everything (with the budget) really is on hold at the moment,” the source said. “There are no discussions. We are going to wait a week or two to see how the situation develops” and whether the minority government survives.

A year ago, Bennett formed a narrow, ideologically diverse coalition of right, liberal and Arab parties. But the government has staggered ever closer to implosion, since he now controls just 59 of the Knesset’s 120 seats.

The coalition last November managed to approve a 2022 budget, the first to be passed in more than 3-1/2 years due to a political stalemate under Bennett’s predecessor, Binyamin Netanyahu, now leader of the opposition.

By law, the budget must be approved by March 31, 2023 or new elections are automatically triggered, although the prospect of a fifth election in three years has already become more likely.

“I don’t see any option that the budget will pass right now in the Knesset at least until Orbach will come back into the coalition,” said Assaf Shapira, head of the political reform program at the Israel Democracy Institute.

With Orbach signaling his opposition to any motion to dissolve the Knesset, which would require 61 votes to pass, the minority coalition could survive until March 2023.

Another option would be for Netanyahu to cobble together a coalition of at least 61 lawmakers, which would require party defections.

“Even with 59 Knesset members, it’s not a stable coalition,” Shapira said. “Not only is this a minority government — even within the minority government there are dissidents.”