Israeli backlash as Netanyahu budget victory revives reforms
▶ Israeli opposition says more spending on ultra-Orthodox does nothing to address cost of living crisis
Opponents of Israeli Prime Minister Benjamin Netanyahu promised to “shake up the country” if he went ahead with a judicial overhaul after securing a two-year national budget yesterday.
Mr Netanyahu suggested his budget success could clear the way for a resumption of his right-wing coalition’s controversial reforms.
The introduction of the plan to limit the Supreme Court’s powers in January set off months of anti-government demonstrations. Compromise talks have been taking place since the plan was suspended in March.
But should Mr Netanyahu now pursue the legislation unilaterally, opposition leaders Yair Lapid and Benny Gantz have promised a strong response.
Asked if the judicial reforms were back on the agenda, Mr Netanyahu said: “Certainly. But we are trying to reach understandings [in the compromise talks]. I hope we will succeed in that.”
Mr Lapid demanded that President Isaac Herzog, who has been mediating negotiations with the government, demand a clarification from Mr Netanyahu.
Mr Herzog has previously voiced hope of reaching a compromise.
Mr Gantz, Mr Lapid’s coalition partner, said on Twitter that if the overhaul was tabled “we’ll shake up the country and stop it”.
The budget increases funding to seminaries for ultra-Orthodox Jewish men, which economists warn means fewer will enter the broader workforce.
Hundreds of millions of shekels will go to settlements in the occupied West Bank, which Palestinians want as the core of a future state. Critics said the spending was at the expense of wider Israeli interests.
Mr Lapid denounced the budget as “a breach of contract with Israel’s citizens, which all of us – and our children and children’s children – will yet pay for”.
The shekel yesterday fell about 1 per cent against the dollar to 3.735, its weakest since March 2020, in what analysts said was a response to the prospect of more political and economic furore.
The two-year budget passed by Prime Minister Benjamin Netanyahu’s government yesterday could relight the movement that took to the streets of Israel in protest against his coalition’s legal reforms.
The budget has drawn criticism from government and opposition for increasing funding to schools and seminaries that serve the growing ultra-Orthodox Jewish communities, a series of steps it was told would make unemployment worse.
Mr Netanyahu’s right-wing coalition has faced months of demonstrations against its proposals to limit the Supreme Court’s powers to rule against decisions by the legislature and the executive.
Mr Netanyahu said a “new day dawns” for Israel after mustering the coalition’s 64-to-56 majority for a speedy Knesset ratification. In the days leading up to voting on the budget, some far-right parties threatened to leave the coalition because of the allocations.
The budget earmarks 484 billion shekels ($131 billion) for this year and 514 billion shekels for the next.
Asked if the judicial reforms were now back on the agenda, Mr Netanyahu said: “Certainly. But we are trying to reach understandings (in the compromise talks). I hope we will succeed in that.”
He also pledged to tackle inflation, which has been compounded by investor flight and dampened growth prospects linked to opposition to the legal reforms.
While the budget could buy Mr Netanyahu some quiet inside his coalition of ultra-Orthodox and ultranationalist parties, it may deepen the divisions in Israel.
The budget has been criticised for allocating almost $4 billion in discretionary funds, much of it for ultra-Orthodox and pro-settler parties.
There are increases in controversial stipends for ultra-Orthodox men to study full time in religious seminaries instead of working or serving in the military, which is compulsory for most secular men.
The funds also include tens of millions for hardline pro-settler parties to promote pet projects through the ministries they control.
Israeli Finance Minister Bezalel Smotrich has said he hopes to double the population of West Bank settlements in the years ahead.
Israel’s far-right National Security Minister Itamar BenGvir praised the budget’s allocation of more than $2 billion, which he said paved the way for his proposal to establish a national guard.
Opposition leader Yair Lapid said the budget makes “no attempt to fight the cost of living – just endless extortion”.
Critics have accused Mr Netanyahu of increasing spending on his ultra-Orthodox allies for religious programmes that have little benefit for the economy and broader society.
Analyst Dahlia Scheindlin said that yesterday’s spending package was “a different look from the sheer chaotic incompetence of the [government’s] first five months”.
‘But the big test is what happens now,” she said. “The judicial reform is still festering and there’s still no solution.”
Economist David Rosenberg told The National the budget was “based on overly optimistic forecasts for economic growth and tax revenues”.
“The result is a big risk that the budget deficit will become wider than the government is expecting,” he said. “Because these schools do not teach a core curriculum that includes science, maths and English, even ultra-Orthodox men who do want to work will have a difficult time trying to find lucrative employment.
“Israel is a high-tech economy and the demand for unskilled, uneducated labour is very low.”
Mr Netanyahu said that the coalition’s judicial reforms were back on the agenda and compromise talks were continuing