Knesset Approves Final Readings of the Additional Budget for 2024

By Aryeh Stern

​In its sitting on Wednesday, the Knesset voted to approve in second and third readings the Additional Budget for Fiscal Year 2024 Bill, 2024, and the bills accompanying it, after all reservations to the bills were voted down. In the vote on the additional budget bill, 62 MKs supported the bill, versus 55 who opposed it.

The first bill approved was the Additional Budget for Fiscal Year 2024 Bill, 2024. The bill proposes that the government expenditure limit for 2024 stand at NIS 584.1 billion. Due to the expenditures of the Swords of Iron war, the budget for calculation of the expenditure limit is higher than the budget approved in May 2023 by about NIS 70.4 billion (14.55%): NIS 55 billion (11.35%) for financing military needs, and NIS 15.5 billion (3.2%) for financing civilian needs. In comparison with the budget approved in May 2023, the revenue-dependent expenditure budget within the budget bill is higher by NIS 59.9 billion (124%), and the spending authorization framework in the budget bill is higher by NIS 52.7 billion (35%).

Also approved was the Deficit Reduction and Limiting Budgetary Expenditure Bill. The bill raises the deficit target for 2024 to 6.6% of the GDP instead of 2.25% (as approved in May 2023). The difference in the deficit targets amounts to about NIS 70 billion, and it is designated to finance the additional expenditures required as a result of the war.

The following bills were also approved, as part of the plan for attaining the budgetary objectives for 2024, in light of the war expenditures:

The National Insurance Bill, in which it is proposed to stipulate that the average wage for the purpose of collection of national insurance fees and health insurance fees in 2025 will be the average wage as of Dec. 31, 2024, with the aim of increasing the insurance fees that will be collected in 2025.

The Freezing and Reducing Convalescence Pay in 2024 for Budgeting Benefits for Reservists Bill, which proposes that the amount of convalescence pay in 2024 will be frozen and that one day of convalescence pay will be reduced for all workers in Israel for the purpose of financing benefits for reservists. For a worker whose average income does not exceed NIS 6,000, and is entitled in 2024 to five convalescence days, only half a day of convalescence pay will be reduced.

The National Health Insurance Bill, in which it is proposed to raise health insurance fees starting in 2025 to a rate of 5.165% (instead of the current rate of 5%). For the income of workers and self-employed individuals earning up to 60% of the average wage, health insurance fees will be raised to a rate of 3.235% (instead of the current rate of 3.1%).

The Special Payment for Attaining Budgetary Objectives Bill, which proposes, as a temporary provision, that every bank except those with a small scope of activity will pay the state treasury in 2024 and 2025 an amount equal to 6% of the profit it made on its activity in Israel in each of those years.

Also approved was the Finance Committee’s decision on an order to raise the tax on cigarettes and smoking products, and to equalize the taxation on e-cigarettes, starting from July 2024.

During the summation of the debate, Finance Committee Chair MK Rabbi Moshe Gafni (United Torah Judaism) said, “We approved a significant portion of the budget that was prepared in the Ministry of Finance. I am not pleased with what was done there, and changes have to be made. We will discuss the compensation for those whose problem has not been resolved. We will discuss the budget of the Arab sector. It will not pass in the committee in this manner. We will vote in favor of the budget because of our responsibility to do so, nothing more. With all the reservations I mentioned about the budget, I believe that the budget should be approved, and that we should keep fighting for the things we want, and that is what we are going to do.”