Israeli parliament passes controversial budget despite widespread criticism

The Knesset, Israel’s parliament, has approved a two-year state budget despite criticism that unprecedented public funds were transferred to ultra-Orthodox and right-wing groups in return for their backing.

All 64 Knesset members from prime minister Binyamin Netanyahu’s right-wing and religious coalition voted in favour of the budget early on Wednesday morning with 56 opposition representatives voting against. The passage of the budget marked an important victory for Mr Netanyahu’s government as failure to do so would have automatically triggered new elections.

“We are passing a responsible, excellent budget that will faithfully serve the citizens of Israel and lead to an improvement in their quality of life,” Mr Netanyahu told the Knesset, vowing that the government would remain in power for four years. He added that the plan had received praise from international credit rating companies.

Opposition head Yair Lapid said the budget offered no hope. “While you were sleeping, the worst and most destructive budget in the country’s history was passed,” he said. “It reflects endless extortion and is a violation of the contract with Israel’s citizens, which all of us, and our children and our children’s children, will pay for.”

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Another opposition politician, Avigdor Lieberman, leader of the right-wing Yisrael Beiteinu, said the budget represented a plundering of the public coffers.

“It will lead to the destruction of the Israeli economy and deliver a mortal blow to the middle class – the people who serve in the military, who work and who pay taxes.”

Mr Netanyahu agreed to last-minute deals with the ultra-Orthodox parties and the far-right Otzma Yehudit (Jewish Strength), promising them huge cash transfers.

Most of the funds will go towards ultra-Orthodox schools, which operate independently from the Israeli school system. Many of them focus entirely on religious studies and some have no maths and English classes at all, leaving pupils ill equipped to enter the job market.

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Some 300 leading economists signed a letter warning against transferring funds to the ultra-Orthodox school system as well as increasing stipends for full-time yeshiva religious seminary students. They warned that the moves would cause “significant and long-term damage to Israel’s economy and to its future as a prosperous country.”

Other funds were allocated for a host of “Jewish heritage” projects including extra-curriculum classes for state schools. Financial incentives will be given for Jews to move to mixed Jewish-Arab cities and a centre for commemorating the legacy of the Jewish settlements in Gaza that were dismantled in 2005 has also been allocated funds.

In order to focus on the budget, the judicial overhaul, which opponents claim threatens Israeli democracy, was put on hold. Mr Netanyahu said on Wednesday the judicial reform was now back on the agenda and the government was trying to reach understandings with the opposition in talks under the auspices of president Yitzhak Herzog.

National Unity party head Benny Gantz warned Mr Netanyahu against returning to the controversial legislation.

“If the regime coup is placed back on the agenda, we’ll rattle the country and we’ll stop it,” he warned.