Cabinet approves NIS 13.7b for Charedim
Opposition leader Yair Lapid called the amount and allocation of coalition funds "irresponsible and corrupt", and a robbery of public money.
Israel’s cabinet on Sunday approved NIS 13.7 billion (A $5.6 billion) worth of coalition funds mainly allocated in support of ultra-Orthodox institutions and programs as the Treasury warned that the promised funds could lead to trillions of shekels in lost gross domestic product in the coming years.
Agreement over the funds comes as the government has just over two weeks to pass the proposed two-year, 2023-2024 trillion-shekel overall budget, through the committee process and votes on the Knesset floor before its May 29 deadline, or risk triggering an automatic dissolution of parliament and snap elections.
Prime Minister Benjamin Netanyahu’s Likud party has made generous promises of billions of shekels to secure the support of its ultra-Orthodox and far-right coalition partners, including ample funding for Charedi education and religious initiatives. About NIS 3.7 billion is promised to be spent on increasing the budget for stipends at religious yeshivahs, while around NIS one billion is directed to a food voucher program being pushed by Shas leader Aryeh Deri.
Another NIS 1.2 billion is budgeted for private, non-supervised educational institutions, which do not teach core subjects such as maths and English. Additional funds will be funnelled for ultra-Orthodox education, religious buildings and supporting Charedi Jewish culture and identity.
The coalition funds have in recent years been distributed from the state budget to preferred and sectoral goals as demanded by the parties, and have evolved as a condition for their support to pass the budget. At the end of March, the Knesset approved in its first reading the state’s 2023-2024 overall budget. It allocates NIS 484.8 billion this year and NIS 513.7 billion in 2024, up from NIS 452.5 billion in 2022.
Opposition leader Yair Lapid called the amount and allocation of coalition funds “irresponsible and corrupt”, and a robbery of public money.
“This is the money of the productive public in Israel,” Lapid stated in a video message. “Instead of investing it in the education of our children, in lowering the unbearably high cost of living, in economic growth engines, in protecting day care centres near the Gaza Strip, they invest it in buying votes.
“Netanyahu has sold the Israeli economy and the future of our children to the Charedim and Smotrich so he can stay in power.”
Ahead of the vote, Finance Ministry Budgets Department head Yogev Gardos warned the allocation of funds creates negative incentives for Charedi men to seek employment and will harm the country’s labour market and the economy as a whole.
“Increasing the budget for non-supervised private educational institutions, while establishing a mechanism for the provision of allowances through the distribution of food vouchers, and raising yeshivah budget funds are expected to create a system of anti-
economic incentives that encourages an exodus from the labour market and lower the earning capacity of ultra-Orthodox society,” Gardos wrote in a report.
He warned the loss of cumulative GDP until the year 2060 was already expected to be NIS 6.7 trillion and said if the employment participation rate among Charedi men is not encouraged, by 2065 the government will have to increase direct taxes by 16 per cent to maintain the same level of services that it provides now.
Israel’s ultra-Orthodox population, which constitutes about 13.5 per cent of the country’s total population is expected to grow to 16 per cent in 2030.
As of the end of 2022, Charedi male participation rate in the labour market stood at 53 per cent compared to 87 per cent among non-religious Jewish men, according to the Finance Ministry report.
TIMES OF ISRAEL
comments