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Israeli government passes first national budget in three years, still requires Knesset approval by November

Bennett: ‘After three years of stagnation, Israel is back to work’

Israeli Prime Minister Naftali Bennett leads a Cabinet meeting at the Prime Minister's Office in Jerusalem, August 1, 2021. (Photo: Emil Salman/POOL)

After marathon meetings on Sunday evening, the Israeli Cabinet passed a state budget – Israel's first since 2018.

"Ladies and gentlemen, Israel has a budget, a budget of a government that cares. After three years of stalemate, Israel is returning to work," Prime Minister Naftali Bennett said in a statement.

He continued, “I would like the ministers to understand the nature of the moment: After three years of neglect, this morning we have brought the most daring and competitive budget, that gives the most assistance to the weaker sectors and that is most concerned about the future of our children, in years.”

While the new budget attempts to limit perks for the ultra-Orthodox community – a major criticism of Benjamin Netanyahu's government – it also raises taxes on certain items in order to "change behaviors." The proposed budget includes taxes on soda and a VAT on Netflix, while a congestion fee for getting into Tel Aviv during rush hour has also been proposed.

“This is a budget that invests in the future, a budget of growth. We are investing in beneficial public transportation, in Internet infrastructure and technology, in quality education for our children, in our health system, and in our soldiers who will receive the best defense systems to deal with and defeat our enemies,” Bennett said.

The Israeli Cabinet votes to approve the 2021-2022 state budget (Photo: Amos Ben-Gershom/GPO)

The two-year state budget was formulated by Finance Minister Avigdor Liberman and his ministry.

“The reforms that we have approved focus – first and foremost – on lowering the cost of living. We have invested vast sums in infrastructures, transportation and real estate and we have passed significant reforms that will lower barriers and reduce the bureaucracy, which will make things easier for everyone in our daily management, business or private,” Liberman said.

He continued, “The path to approving the budget in the Knesset is starting at these very moments and together, through cooperation, we will pass it in three readings and we will ensure economic growth and administrative stability for the citizens of the State of Israel.”

The deadline to pass the budget is in November. With a majority of only one seat and heavy opposition expected, the coalition is going to need uniformity in its voting if the budget has any hope of passing the Knesset.

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