The sun rose and a new chapter began in Israel. Towards this Wednesday morning, the government led by Benjamin Netanyahu confirmed the budget for the next two years. Thousands gathered in the suburbs while the Knesset, Israel’s parliament, held firm against what supporters saw as unfair calculations, but the right-wing majority held its ground in the Assembly. While the budget approval promises some stability for the coalition, the country is expected to face ongoing political divisions. The approved text allocates about four billion dollars in discretionary funds, much of which would flow to government ministries, including ultra-orthodox and pro-settlement groups.
“Is this the dawn of a new day?” Netanyahu told Channel 14 after the vote. Weeks of negotiations followed, with threats of resignations from government partners if the most radical factions did not secure their demands. After 36 hours of discussion, a deal was reached for the 2023-2024 budget. It increases funding for strictly religious education and religious seminars even for those who do not participate in military service, which remains mandatory for most secular citizens. It also boosts funding for ultra-orthodox schools, criticized by many for not teaching essential skills such as math or English.
About 280 top economists warned that the new accounting could cause significant and long-term damage to Israel’s economy and its future prosperity.
“The Worst and Most Destructive”
The groups that stand to gain the most are those led by the settlers, who received tens of millions to push projects through ministry channels. The finance minister and settler leader Bezalel Smotrich has signaled plans to double the population in the occupied West Bank to shift demographic balance in the coming years. After the vote, Smotrich declared, “We got the tools, we roll up our sleeves and go to work.” Critics accused the new government of increasing spending on religious programs at the expense of broader economic and social benefits. Still, the Knesset approved the budget with 64 votes in favor and 56 against.
חשבתם כי התקציב הגרוע וההרסני בתולדות המדינה כבר כאן. אין כאן בשורה, אין כאן מאבק ביוקר המחיה, יש רק סחטנות אינסופית. עוד יושקעו עליו מידע נוסף.
— יאיר לפיד – Yair Lapid
“While you’re asleep, the coalition has approved the worst and most destructive budget in the country’s history,” said opposition leader and former prime minister Yair Lapid. He noted that the plan did not meet the concerns of the opposition and warned of a lack of steps to tackle rising living costs. The letter from 280 senior economists calling for common-sense measures to support ultra-orthodox institutions and programs was highlighted in media reports as a counterpoint to the budget practice.
Third World Country
Economists who signed the warning say the million-dollar allowances threaten to reshape Israel in ways that resemble a developing economy. They caution that transfers tied to coalition commitments could surface in the next budget, causing long-term harm to the economy and Israel’s prospects as a prosperous nation. Former Bank of Israel and treasury officials argue that coalition funding is often driven by short-term political goals rather than lasting economic needs, potentially eroding a once-strong foundation and leaving a larger portion of the population without essential 21st century skills.
✔️ ניצחנו בבחירות ✔️ העברנו תקציב ✔️ ממשיכים ל-4 שנים טובות
— Benjamin Netanyahu – בנימין נתניהו
Concerns about the economy drew criticism across the country. Yet Netanyahu’s majority government remains focused on its agenda and plans to pursue changes in various areas. The leadership has signaled that controversial judicial reform plans will return to the legislative agenda after the state budget was approved, keeping a high level of public attention on the streets and in protests. The ongoing civic movement remains active, and debate over these policies continues to shape political life in Israel.