Israel's parliamentary finance committee has approved the 2021-22 state budget, Reuters has reported. A final vote will now be held in the Knesset.
Committee Chairman Alex Kushnir, announced today that members had been through a very significant process, "first and foremost" for the country. "The last budget passed here was in March 2018," explained Kushnir. "This budget contains lots of good economic news for Israel's citizens in addition to historic reforms."
The vote followed "heated" marathon sessions that started on Tuesday and ended around 3am this morning due to some 30,000 reservations by opposition parties.
Failure to give the spending package final approval by 14 November will trigger a snap election. If approved by parliament, it will be the country's first ratified spending package in more than three-and-a-half years.
According to Reuters, the finance ministry added 10 billion shekels ($3.1 billion) before the vote to the reserve budget for 2022 to deal with the expected fourth wave of the Covid-19 pandemic.
The ministry trimmed its 2021 budget deficit target on Monday to 5.5-5.7 per cent of gross domestic product from the previous 6.8 per cent due to higher than expected tax revenues, reflecting a rapid economic recovery from the crisis. It projects a 3.9 per cent deficit in 2022.
The budget, along with an accompanying bill filled with economic reforms, has presented an early test for the cross-partisan coalition government of Naftali Bennett, who took over as prime minister in June after unseating the veteran Benjamin Netanyahu. Two years of political stalemate and four elections had left Israel still using a pro-rated version of the 2019 state budget passed in March 2018. Squabbling within Netanyahu's coalition cabinet last year over a two-year budget for 2020 and 2021 helped bring down his government.
Bennett has a razor-thin majority in parliament. He has been lobbying his coalition partners to avoid conflict and controversial issues that could cause friction until after the budget is approved in the Knesset. Along with his finance minister Avigdor Lieberman, Bennett had come under pressure from ministers and lawmakers upset at some planned reforms, while others sought higher funding.