Key test for new government, cabinet to meet to approve 2021-2022 budget

The cabinet was due to meet on Sunday morning to approve the state budget – the first since 2019 – as part of a major test for the new government.

The 2021-2022 budget ($ 187 billion for 2021, $ 173 billion for 2022) will be put forward by Finance Minister Avigdor Liberman, although it faces significant hurdles in the Knesset before a deadline to pass in November.

The budget will require the passage of all votes of the thin coalition, with the opposition of a single lawmaker capable of bringing it down. The diverse makeup of the new government led by Prime Minister Naftali Bennett – it is made up of right-wing, centrist and left-wing parties – complicates the effort.

Ahead of the cabinet meeting, Meretz Party Health Minister Nitzan Horowitz reiterated his threat to oppose the budget if health care funding is not increased.

“It is a right-wing government. We are heading towards a [political] crisis. Under these circumstances we have no reason to stay [in the government]», Threatened the leftist Horowitz before the meeting.

The new state budget includes sweeping reforms to the establishment of the kashrut and agricultural industry, high taxes on disposable plastic items and sugary drinks, and significant changes in import policies.

Health Minister Nitzan Horowitz speaks during his visit to Beilinson Medical Center, July 27, 2021. (Avshalom Sassoni / Flash90)

Farmers are planning a protest outside the Knesset on Sunday against the agricultural reforms proposed in the budget.

The new budget will also increase the defense budget for 2022 to 58 billion shekels ($ 17.8 billion), according to a government statement last week. This will include a substantial increase – some 7 billion shekels ($ 2.15 billion), according to the public broadcaster Kan – for “the rearmament and reinforcement of the Israel Defense Forces” to prepare the military for a possible strike against it. Iran, according to the press release from the Prime Minister, Minister of Defense and Minister of Finance.

Although not a minister, the leader of the coalition Ra’am party, Mansour Abbas, will be on hand for discussions on the cabinet budget, state broadcaster Kan reported. Government sources will also meet with members of the opposition’s United Arab List to negotiate outside support for the coalition for the state budget, according to the report.

Foreign Minister Yair Lapid (left) speaks with MP Mansour Abbas, leader of the Islamist party Ra’am, during the Knesset plenum on June 21, 2021 (Olivier Fitoussi / Flash90)

Four of the six members of the United Arab List are said to intend to oppose the budget.

The last state budget approved by Israel was in 2019, before the country bogged down in a two-year political stalemate. In the previous government, then Prime Minister Benjamin Netanyahu refused to pass a budget, which allowed him to call an election without coalition partner Defense Minister Benny Gantz immediately becoming Transitional Prime Minister under the terms of their rotation agreement.

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