Proceed with caution

Regardless of what one may think of Prime Minister Benjamin Netanyahu’s coalition, there’s no denying that its passage of a two-year budget last week was an impressive feat.

The budget, which passed in the early hours of Wednesday by a vote of 64-55, totals NIS 484b.in 2023 and NIS 514b. in 2024, the largest in the country’s history. This year’s budget also includes NIS 14b. of special allocations for the needs of the coalition party members.

A number of elements in the budget are disturbing. Among the measures passed in the accompanying Economic Arrangements Law was the controversial Arnona Fund, which will funnel municipal taxes from relatively wealthy cities to those with much smaller incomes.

The budget also includes approximately NIS 3.7b. for private or semi-private haredi (ultra-Orthodox) schools and yeshivot that do not teach core secular subjects, as well as other programs such as food coupons and municipal tax cuts that disincentivize haredi men from joining the workforce.

The long-term effects of these moves will not benefit either the haredi community or Israel’s economy and taxpayers, who will bear the brunt of making up the difference.

As the Post’s Eliav Breuer wrote last week, the government and the opposition depicted two starkly different pictures of the budget.

Netanyahu listed some of the achievements: higher subsidies for daycare centers; a sharp increase in the National Security Ministry budget, which will enable Israel Police to expand; increased funding for academic degrees for discharged soldiers and a NIS 7b. increase in the Health Ministry budget during 2023-2024.

Opposition leader Yair Lapid spoke after Netanyahu, saying the prime minister was “disconnected from reality”. He claimed that some of what Netanyahu assured was in the budget actually did not appear there – such as free education for children aged 0-3, nor a NIS 9b. increase in the National Security Ministry budget, nor significant programs to slash the high cost of living.

Lapid also pointed out that the NIS 13.6b. in coalition funds, intended to finance political agreements, were higher than the entire budget for public hospitals (NIS 12.4b.), or for higher education (NIS 12.6b.).

Regardless of one’s opinion about the budget and its allocations, the crux of its passage is that it offers the coalition a year and a half of stability until the Knesset must approve another budget, and enables Netanyahu and his government to return its focus to the judicial overhaul legislation that has captivated the country since the coalition’s establishment.

When asked if the budget’s passage would prompt the government to jettison the current talks sponsored by President Isaac Herzog to reach a consensus on the judicial overhaul, Netanyahu said, “We will of course continue with our efforts to arrive at a broad consensus agreement, to the extent possible, on the issue of judicial reform.”

Netanyahu is now in the driver’s seat in determining the overhaul’s pace and, consequently, the intensity of the weekly protests against it. He can’t ditch the plan, because it will alienate and anger his party and coalition members.

However, even though the budget passage demonstrates that the coalition can hammer through the legislation it wants, Netanyahu can show restraint and continue to back the negotiations fully to reach an arrangement that isn’t as sweeping as that proposed by some members of his coalition.

That is the correct path to take. Israel does not need a summer of discontent in the streets, and Netanyahu should listen to his rival Benny Gantz.

“I remind Netanyahu that it is stupid to repeat the same action and expect different results. If the judicial coup comes back to the table, we will shake the country and stop it,” Gantz tweeted.

The coalition is entitled to a victory lap in light of the success of its budget legislation. That is no small thing. It should now proceed with caution, as the rest of the country will not sit idly by if it decides to scrap the talks and bulldoze its judicial legislation through the Knesset. The only path forward is a negotiated compromise.