Israeli Budget 2025 Approved Despite Coalition Tensions

By Steven Scheer
JERUSALEM (Reuters) – Israeli lawmakers narrowly approved the country's 2025 state budget in an initial vote despite a rebellion by one of Prime Minister Benjamin Netanyahu's coalition partners demanding he fire Israel's attorney general.

The 59-57 vote in the Knesset, or parliament, to pass the wartime austerity budget in its first of three readings underscored divisions within the coalition that heavily relies on ultra-Orthodox and far-right parties.

Israeli Security Minister Itamar Ben-Gvir and his six-seat ultranationalist Otzma Yehudit party voted against the budget, sparking a war of words with Finance Minister Bezalel Smotrich, the head of another right-wing party.

Ben-Gvir has been pushing for the firing of Attorney General Gali Baharav-Miara on the grounds that she opposes plans to overhaul Israel's judicial system and supports an independent inquiry into Israel’s handling of the Oct. 7, 2023, cross-border incursion led by the Palestinian Islamic group Hamas. He has asked for the issue to be raised at cabinet meetings.

Ben-Gvir stated on X that his faction would no longer be bound by the coalition's positions, including the budget law, and would operate independently.

Addressing Smotrich, he said the government must fire the attorney general so it can implement its policy. The right-wing government had to either send her home or face having her bring the government down, Ben-Gvir wrote.

A month ago, in a letter to Netanyahu, Baharav-Miara asked the prime minister to consider firing Ben-Gvir, citing evidence that he allegedly interfered directly in police operations and politicized promotions within the force, threatening its status outside politics.

Should the issue be raised at Sunday's cabinet meeting, "the crisis will be behind us," Ben-Gvir added.

In posts on X, Smotrich accused Ben-Gvir of irresponsibly aligning with the opposition and Arab parties, jeopardizing their right-wing government in wartime.

Smotrich claimed Ben-Gvir and his party were endangering a historic opportunity for further Israeli settlement of the occupied West Bank. “We will continue to work for the people of Israel and for victory in the war, with or without Ben-Gvir,” he wrote.

Netanyahu in September sought to bolster his coalition, which had a 64-56 edge in Knesset. By bringing in opposition lawmaker Gideon Saar and his four seats in the New Hope party, he aimed to become less reliant on other coalition members. Saar last month was named foreign minister.

Total budget spending in 2025 will be 756 billion shekels ($210 billion), with a deficit target set at 4.4% of gross domestic product. The budget includes spending cuts and tax increases of 37 billion shekels, needed to keep the deficit under control as war costs have soared. Spending on defense will be 108 billion shekels next year.

All three agencies have cut Israel's credit rating this year due to war expenses that have pushed the budget deficit near 8% of GDP.

The budget next goes to the Knesset finance and other committees, where it could face changes. It is not expected to be fully approved until at least January. Until a budget is approved in 2025, the 2024 budget will be divided into 12 parts, with one-twelfth allocated each month.

Failure to approve the budget by March 31 would trigger new elections.

($1 = 3.6019 shekels)