Coalition passes 2021 budget, first in 3.5 years, averting early election threat

The Knesset early on Thursday passed Israel’s first budget in over three years, averting the prospect of immediate early elections, as Prime Minister Naftali Bennett’s coalition overcame its differences and opposition objections.

Approved 61-59, the 2021 budget was the most politically sensitive of the budget laws facing the Knesset, since a failure to pass it would have meant the automatic dissolution of parliament.

Legislators were due back in the plenum hours later to vote on the rest of a series of bills meant to guide the country’s spending until the end of 2022.

The 61-59 vote saw lawmakers vote along coalition-opposition lines to approve the 2021 state budget in final readings just after 5 a.m, following an all-night session that they will be expected to repeat over the coming 24 hours to vote on the rest of the budget items.

The NIS 609 billion ($194 billion) spending plan for 2021 is the first budget Israel has passed since 2018, due to a prolonged political deadlock that saw successive governments fall before they could bring a proposal to the Knesset.

Passing the 2021 budget was a key test for Bennett’s eight-party coalition, both to prove that the ideologically disparate alliance can come together on major issues and because failure to do so by a November 14 deadline would have triggered new elections automatically.

Prime Minister Naftali Bennett and colleagues, including coalition chair Irit Silman (back to camera), gather in the Knesset as the state budget for 2021 is approved, November 4, 2021 (Yonatan Sindel/Flash90)

Approval was quickly feted as a success by Bennett and other coalition leaders.

Bennett tweeted that the budget’s passing was a “day of celebration for the State of Israel.”

“After years of chaos — we created a government, overcame the [coronavirus] Delta variant and now, thank God, we passed a budget for Israel! Continuing forward at full strength,” he wrote.

MKs were due to reconvene at 10:30 a.m. after a few hours of rest to pass the Economic Arrangement Bill that details how the financial plan will be put into practice, followed by a vote on a NIS 573 billion ($183 billion) budget for 2022. That budget doesn’t pose an immediate threat of early elections, but still must be passed by the end of March 2022.

The overall budget plan includes nearly $10 billion in funding over five years to improve socioeconomic conditions for Israel’s Arab minority, which the Arab Ra’am party had demanded as one of the conditions for their support. It also hikes some taxes that the ultra-Orthodox argue will affect them the most.

Despite having only a single seat edge over the opposition, the coalition managed to win all of the several hundred votes held late Wednesday and early Thursday.

Prime Minister Naftali Bennett during a plenum session to vote on the state budget in the Knesset in Jerusalem, November 3, 2021. (Olivier Fitoussi/Flash90)

Bennett had earlier predicted the coalition would have a 780-0 record, referring to the number of votes it was expected to take to pass the whole package.

In his remarks from the Knesset podium on Wednesday evening ahead of the voting, Bennett said passing the budget was “the most important moment since the government was formed.”

He said the new budget being introduced comes “after three and a half years of chaos, failed management and paralysis, years in which the country was a tool in a personal game, years of four election campaigns one after another at a dead end.”

The diverse composition of the government led by Bennett — made up of right-wing, centrist and left-wing parties plus an Islamist faction — had, however, complicated the effort to pass a budget, with the opposition of a single lawmaker theoretically able to bring down the wafer-thin coalition.

Some individual lawmakers used the coalition’s tiny margin of 61 seats in the 120-person Knesset to force their issues, such as New Right’s Zvi Hauser, who threatened to boycott the plenum unless more money for the National Library was included in the budget.

In another incident, Housing Minister Ze’ev Elkin agreed to postpone and reconsider the planned eviction of a family from public housing in the town of Gan Yavne, after two coalition lawmakers said they would leave the plenum Thursday morning to observe the removal of the family.

As the marathon session began, it became clear that the Joint List, a predominantly Arab Israeli party, was voting with the rest of the opposition against the budget, meaning that the coalition would likely need all of its lawmakers present for the entire voting process. However, the Joint List voted with the coalition on objections raised by Likud, giving the coalition a bit of breathing room.

Opposition leader Benjamin Netanyahu also helped the coalition along at one point, accidentally voting with the government. The same mistake was also made by Shas head Aryeh Deri, though their votes did not change the outcome in either case.

While failure to pass the bill could have seen the government collapse, passage of the economic plan is expected to stabilize the coalition for the near future at least, amid attempts by the opposition to drive wedges between the coalition’s various ideologies.

Throughout the night, MKs fortified themselves with candies and sweets to stay awake and alert as they sped through votes, while also aiming bitter accusations across the aisle at each other.

In a speech ahead of the voting, Netanyahu lauded anti-government protesters who gathered in Tel Aviv’s HaBima Square Tuesday, saying they came to “drive out the darkness “of the current government.

Digging into the ruling coalition, Netanyahu denounced the “government of lies,” which, he asserted, would raise the costs of living for Israelis.

Opposition leader Benjamin Netanyahu at the Knesset ahead of the vote on the state budget, November 3, 2021. (Olivier Fitoussi/Flash90)

Earlier, Finance Minister Avigdor Liberman said it would be the first budget passed in three and a half years “because of the personal interests of one man, who was willing to sacrifice Israel’s economy” for that interest — another reference to Netanyahu.

Netanyahu is widely believed to have torpedoed the most recent budget under his power-sharing government with Benny Gantz, in order to bring down that coalition and avoid passing the premiership on to him as had been agreed between the two as part of their deal.

That fight led directly to the collapse of the last government and the most recent election, the results of which saw Netanyahu ousted from office.