• Ayelet Strenger

Government of Change – Israeli coalition agree on state’s budget


Following a long period of government instability and four elections within the space of two years, a state budget was passed in the Knesset, Israel’s national parliament. For many, this budget provides hope for political stability in the future.


By a slim margin, 61 majority v 49 against, finally after over three years since the last state budget was passed, Israel is ‘back on track’ as a state budget has been approved.


With the threat of the Knesset being dissolved, Prime Minister Naftali Bennett had to get a state budget passed to prevent a fifth election. Despite the many critiques of this coalition on both the far right and left, the coalition have managed to put their ideological differences aside for the greater good of Israel. The coalition comprises of eight-parties from the hard-right to the fringe left, including centrist parties, an Arab party and a religious party. The budget was crucial to the survival of this coalition.

The previous government collapse occurred when Netanyahu postponed passing a state budget; critiques say this was a tactical move as with the passing of the state budget came a clause that resulted in Minister of Defence Benny Gantz taking over as Prime Minister.


The budget has been strongly opposed by the opposition, most notably Benjamin Netanyahu. According to this budget over the next 10 years, the Arab sector are set to receive 32 billion shekels (approximately USD 10.3bn) . Netanyahu heavily criticised this due to the fear that this money will end up in the wrong hands, “Hamas will certainly be happy.”

However, the threat of funds ending up in terrorists’ pockets was not the only criticism of this state budget. Shas, a major orthodox party, raised concerns over the increased taxation. The result of this policy would lead to higher inequality and harm the working class. Shas also pointed out that those affected the most would be families with many children and elderly.

Nonetheless, this budget was celebrated amongst ministers in the coalition, many of whom took to twitter to share. Defence minister Benny Gantz declared the budget as a “victory for the country.”


The Knesset have set the budget of 2022 as $183 billion and finally, 11 months into 2021, the 2021 budget was agreed on as $194 billion. The budget will allow for Israel’s finances to return to normal and is backed by the hopes that it will lead to economic recovery. The plan includes upgrading public services, increasing competition in the market and reducing regulations in both the private and public sectors, as well as continued investment in technology and human capital to reduce unemployment.


This budget marks a turning point for the coalition and renewed hope of a return to ‘normalcy’, with the central bank predicting seven per cent economic growth this year.




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