Israel Still Without State Budget, but Cabinet Approves $3.2 Billion in Increased Spending

The cabinet had previously cancelled meetings on extra funding, which will be allocated to defense and various projects, due to ongoing coalition dispute between Netanyahu's and Gantz's parties

Noa Landau
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Prime Minister Benjamin Netanyahu and Defense Minister Benny Gantz prepare to speak at a press conference in central Israel, September 7, 2020.
Prime Minister Benjamin Netanyahu and Defense Minister Benny Gantz prepare to speak at a press conference in central Israel, September 7, 2020.Credit: Tomer Appelbaum
Noa Landau

The cabinet approved on Thursday an 11-billion-shekel ($3.2 billion) addition to the state, after three scheduled meetings on the subject were cancelled last month due to disagreements between the two major coalition parties, Likud and Kahol Lavan.

The budgetary increase will boost the defense budget by three billion shekels, raise disability payment funds for the remainder of 2020 by 900 million shekels, and allocate 180 million shekels to bringing about 2,000 Ethiopian immigrants to Israel.

The decision was supposed to be approved under a deal last month that postponed the deadline for approving the full 2020 and 2021 budgets to December. If the deal had not been passed, two hours before the deadline, the Knesset would have automatically dissolved.

Despite the cabinet's approval of the increase, the Knesset will still need to pass the 2020 budget, a contentious and politicized measure. Likud wants to pass a one-year budget and Kahol Lavan a two-year budget; both parties have accused each other of politicizing the process.   

The bill that postponed the deadline included the budgetary increase, but three cabinet meetings on the measure were cancelled in August due to disagreements between Likud and Kahol Lavan. The weekly cabinet meetings were halted last month amid the coalition crisis regarding the budget. 

On Tuesday, Prime Minister Benjamin Netanyahu met with Defense Minister and Alternate Prime Minister Benny Gantz on Tuesday night to discuss the addition. Netanyahu and Gantz also convened a meeting with Finance Minister Yisrael Katz and Economy Minister Amir Peretz in the hope of reaching an agreement that would allow the full cabinet to meet later that night. Kahol Lavan sent in a list of funding demands for projects run by the ministries it heads. 

According to the Finance Ministry announcement, the budgetary increase also includes expanding the allocations for religious education institutions, the World Zionist Organization's settlement division, and Jewish identity projects.

It also includes a "project to empower and develop the Druze and Circassian population," a project to map illegal Palestinian construction in Area C and developing and fortifying Jewish settlement in the West Bank. Archeological digs in the City of David will also be funded, as well as a "project to empower and strengthen the Ethiopian community."

The ministry added that the addition also includes funding to continue educational programs, "a project to accelerate the energy industry, projects for energy efficiency, investment in the natural gas industry, advancing clean transportation and special funding for research and development."

It will also boost support for nonprofits that distribute food to the needy, scholarships for immigrants, grants to support business investment and small businesses, promoting exports and developing industrial zones and grants and budgetary increases for local governments. It will also go towards adding public transportation terminals, increasing the number of street lights and doubling the cat spaying budget.

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