Israeli cabinet approves 2018/19 budget

Following all-night negotiations, Israeli Cabinet ministers on Friday morning unanimously approved a 2019 state budget of NIS 397.4bn ($117bn), which Prime Minister Benjamin Netanyahu promised would ensure the political stability the Government needed to survive until the end of its term late next year.

Netanyahu welcomed the agreement saying: “The Government today approved an excellent budget and an excellent law that expresses our consistent and responsible policy — a budget that on the one hand maintains growth and economic strength, and on the other hand, takes care of the social needs of all Israeli citizens.”

According to a summary of the budget released by the Finance Ministry, the education budget will be NIS 60bn ($17.5bn), a 38 per cent increase since 2014, the health budget NIS 38bn ($11.1bn), a 60 per cent increase, and funding for the Defence Ministry will be NIS 63bn ($18.4bn), an increase of 37 per cent.

“The 2019 budget is a social budget focused on the growth of the Israeli economy and the strengthening of the economy,” said Israeli Finance Minister Moshe Kahlon. He also hailed the budget as revolutionary, claiming it “establishes a new order of distribution”.

According to the Central Bureau of Statistics, Gross Domestic Product (GDP) grew 3 per cent in 2017, following rises of 4 per cent in 2016 and 2.6 per cent in 2015.

Israeli Education Minister Naftali Bennett, who didn’t attend the Cabinet meeting after securing an increase in the education budget, said the budget prioritises education.

“School vacations will be shortened by 10 days, 5,100 kindergartens will get a second assistant, class sizes in grades 4-6 will shrink, and improvements in mathematics, science and English will continue,” he said.

Several Cabinet members publicly criticised the budget before it passed for proposed cuts to their ministries, including Environmental Protection Minister Zeev Elkin, who was opposed to treasury plans to take NIS 500m for the budget from a clean-up fund, and Labour and Welfare Minister Haim Katz, who hoped the budget would raise allowances for people with disabilities. The Interior Ministry also resisted a treasury plan to take NIS 1.2bn from surpluses amassed by the Israel Airports Authority from the budget.

The approved budget includes a cut to the Foreign Ministry, which will result in the closure of at least seven diplomatic missions. An earlier plan had called for the closing of 22 missions worldwide.

The budget will now go the Knesset’s Finance Committee before a final vote in the Knesset.