The final debate on the 2015- 2016 state budget is scheduled to begin Monday, after the Knesset Finance Committee approved the budget Sunday, following last-minute wrangling by coalition parties.
MKs will discuss the budget – which includes 2015 because last year’s budget votes were canceled due to an election being called – until Wednesday, when voting is scheduled to begin, which is expected to continue through Thursday.
The Finance Committee vote, authorizing the budget for its final plenum readings, was held up until Sunday evening after having been called for 10 a.m. – already a delay from last Wednesday.
Defense Minister Moshe Ya’alon and Finance Minister Moshe Kahlon reached an agreement over the weekend to keep the long-debated defense budget at the amount approved in the first reading of the state budget: NIS 56.1 billion.
The amount was then approved by the joint Knesset Finance and Foreign Affairs and the Defense subcommittee on the Defense Budget on Sunday.
Over the course of 2016, another NIS 3b. is expected to be diverted to the defense department on the condition that the IDF takes efficiency measures, including shorter compulsory service, multiyear budgetary planning and changes in pensions. Some of the extra funds are meant to go to increasing IDF soldiers’ pay by hundreds of shekels per month.
Prime Minister Benjamin Netanyahu said it was the first time in his experience that a defense minister and finance minister agreed on a formula for the defense budget.
“I think that this process is worthy of note because it allows us to manage the budget properly,” Netanyahu said, adding that the government will consider a multi-year defense budget that combines elements of the “Gideon” plan and Locker Committee, both of which offered policy recommendations on defense reforms.
“I think that we understand that the IDF needs to undergo changes because our region is undergoing changes, the threats against us and the weapons aimed against us are undergoing changes; and our military is also undergoing welcome and important changes. A strong army is important for a strong economy and vice-versa,” he said.
Kahlon said the agreement to increase security force salaries up to 50 percent “is beneficial to those who serve us, fight for us, and endanger their lives for our security.”
The agreement, he added, would help focus resources on defense without requiring the security establishment to “beg politicians for more money.”
A recent study by the Van Leer Institute found that politicians have been willing to open the state’s purse for defense. Security spending between 2000 and 2014 was 17% higher than budgeted, on average, while all other ministries typically under-spent by an average of 8%.
Opposition MKs took issue with the idea of committing to an extra NIS 3b. that is not part of the budget, and MK Haim Jelin (Yesh Atid), a resident of Kibbutz Be’eri near the Gaza Strip, complained that not enough of the defense budget is allocated to building a security fence between Israel and Gaza.
After a full weekend of negotiating, with daily meetings from Thursday to Sunday, Kahlon and Shas chairman Arye Deri came to a compromise over the latter’s demand that value-added tax be canceled for water and electricity for the poor, and for public transportation for all. The Finance Ministry had adamantly opposed the idea of canceling VAT in any way, and Bank of Israel Gov. Karnit Flug and Finance Ministry director-general Shai Babad met with Netanyahu Saturday night to convince him to reject the idea, to no avail.
The cabinet voted to authorize Deri to be responsible for the plan’s implementation, which will take place by January 1.
Netanyahu said he does not like the decision but has to honor coalition agreements.
“I promised 0% VAT on basic products, and these are the most basic products,” Deri said after the vote.
“This decision will mostly benefit the weakest populations and those we have to help.”
National Infrastructure, Energy and Water Minister Yuval Steinitz was the only minister to vote against the policy, saying that as a former finance minister, he sees it as a “slippery slope.”
To support Deri’s 0% VAT plan, the cabinet was informed that all ministries’ budgets will be reduced by 0.7%, but Education Minister Naftali Bennett was unwilling to accept the cut, threatening to have Bayit Yehudi vote against the budget if the funds are not reinstated.
“Last night, I was surprised to learn that the Finance Ministry plans to cut almost NIS 200m. from the education budget, severely hurting the periphery and special education,” Bennett wrote on Twitter Sunday morning. “If it’s not canceled, we will vote against the budget.”
MK Bezalel Smotrich, Bayit Yehudi’s representative in the Finance Committee, did not show up for meetings or votes until late afternoon, although he was in the Knesset. In addition to Bennett’s demand, Smotrich called for planned cuts in security to Jewish homes in east Jerusalem to be canceled.
“I don’t know how, in our current security situation, we could lower security,” Smotrich told Army Radio.
By afternoon, Smotrich was back in the committee, and Bennett tweeted: “Thank you to the prime minister and finance minister for canceling the decree of the [budget] cuts.”
Only NIS 20m.-30m. were cut from education instead of the planned NIS 180m., and the funding for securing Jewish homes in east Jerusalem was increased to NIS 83m. instead of NIS 50m.
Finance Committee chairman Moshe Gafni (UTJ) had to stop the meeting on the budget at one point after discovering a discrepancy in the defense budget in an item in which the text said the budget is NIS 3b. but the number written was NIS 300m.
During the discussion, the Finance Ministry revealed the “coalition money,” meaning funds relegated to areas that MKs from the coalition and opposition chose to support.
Gafni signed more agreements for coalition money than any other lawmaker.
The money will go to items such as religious services, helping the blind and elderly, mental health, Jewish education, victims of sexual assault, the Western Wall Tunnels, cemeteries, and other areas.
Knesset Speaker Yuli Edelstein’s coalition money went to Jewish education in the Diaspora, Zionist education, Yad Vashem and mikvaot, among other items.
Smotrich ensured funds would go to local authorities in the West Bank and to the Galilee Development Authority. MK Miki Zohar (Likud) funneled money to education about Jewish identity and the Land of Israel and to security in the West Bank, and Knesset Interior Committee chairman David Amsalem (Likud) diverted funds to an emergency room in Kiryat Shmona.
Shas received funds to “memorialize chief rabbis,” which could be used for the party’s deceased spiritual leader and former chief rabbi Ovadia Yosef. Their other funds will go to “fertility according to Jewish law” and Zionist education for people from the former Soviet Union, among other items.
In the opposition, Meretz chairwoman Zehava Gal-On ensured money would be invested in finding employment for the elderly, and MK Michal Biran (Zionist Union) sought to fund youth movements.
Although Biran received coalition money, Zionist Union MKs slammed the practice.
The money is “100% for political survival... while abandoning the periphery, Jerusalem, the North, small businesses and young people in Israel,” said MK Erel Margalit.
The opposition asked for funding to go to doctors in the periphery, mortgages with low interest rates for the needy, and orphans whose parents were killed in terrorist attacks, among other areas.
“This is buying the government with money,” MK Miki Rosenthal (Zionist Union) lamented, calling the practice a “political bribe.”