BICOM

Negotiations over Israel’s state budget continued this week as Israel’s coalition parties all looked to secure their interests.

A critical vote to bring the budget out of the Economic Affairs Committee was delayed last week after the Shas party threatened to vote against it. Shas is demanding an end to VAT on public transport for all and on electricity for the poor. The move, costed at 700 million shekels, was agreed in the coalition agreement between Shas and Likud but does not currently appear in the budget.

Shas is also demanding increased state funding for the ultra-orthodox political parties. Shas leader Arye Deri is due to meet Finance Minister Moshe Kahlon to try to reach a deal.

The evergreen debate over the defence budget remains a sticking point. According to finance website Globes, Moshe Kahlon has reached an agreement with the Defence Ministry over structural reforms to the general staff including cuts of 10-25% in many non-combat back-office areas and a reduction of 40,000 full-time IDF staff.

However, Defence Minister Moshe Yaalon is still seeking an increase in the overall defence allocation in the budget and even urged Knesset Members to oppose the budget until he gets it. He is supported in this by Jewish Home MKs. Mr Yaalon is also supposed to meet Mr Kahlon.

The budget is due to pass on Thursday 19 November. However, ultra-Orthodox parties Shas and United Torah Judaism have said that they will not vote to support a budget unless a bill to relax rules on ultra-Orthodox military enlistment passes all of its stages including committee and amendments.

Israel’s coalition, with a 2-vote majority in the Knesset plenum and a 1-vote majority at many committees, may face a nerve-biting political week as Thursday’s deadline nears.