The Israeli government is raiding state coffers to stay in power

Israel’s Finance Minister, Bezalel Smotrich has shown rank ineptitude when it comes to the finances of the nation. Predictably, he described last week’s budget as a “responsible’ wartime budget, a “budget of necessity” driven by the costs of war.

However, as presented, this latest financial plan for the country is anything but responsible. What was clearly necessary was rejected for what is wholly unnecessary but politically expedient. It’s a “Smash and grab”, bordering on the criminal.  Netanyahu’s gang of thieves is smashing ordinary Israelis while stabbing them in the back, as it raids the state coffers and grabs the money for itself, to ensure the coalition’s survival for an extra few months, the country be damned.

Those carrying the weight of the war are now expected to bear the additional financial burden, imposed upon them by a government that treats the country and its citizens with nothing but contempt.

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It’s the largest budget in Israel’s history. The government talks about a spending framework of NIS 699 billion, although actual authorised spending is closer to NIS 850 billion. The defence budget that has ballooned to over NIS 142 billion, as the longest war in Israel’s history continues to drain resources at a rate estimated at around NIS 3.7 billion – circa $1.6 billion every week.

The current situation, with over two and a half years of war, ongoing threats and alarming numbers, surely demands financial discipline, restraint and clarity of purpose. Budget cuts are to be expected. The war has to be paid for somehow, but in a strategic and intelligent manner, with laser focus on securing the best interests of the country and the people.

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Apparently not, as far as Netanyahu and his coalition partners are concerned.

There is a 3% cut across key ministries, reducing funding for health, education, welfare, infrastructure and others, all of which are already under severe strain. Israel has tens of thousands of war wounded to be treated, in addition to the normal day-to-day healthcare needs of ten million citizens. Children have not been to school for over a month, after an extended period of interruptions in learning for the third school year in a row. Parents are at the end of their tether. The level of collective trauma in the country has created a mental health crisis, without the resources to address it.

Extended periods of reserve duty are taking their toll. Families are struggling to cope. Businesses are missing key workers. Business owners are losing their businesses. There is a cost of living crisis, driving more and more families into debt and financial hardship. According to Israel’s National Insurance Institute, around 28% of Israeli children are living below the poverty line.

Rather than address, or at least, move towards addressing these core issues, this government has delivered a budget that pretty much ignores them all, while serving the narrow interests of this most fragile of coalitions. Fragility, it would appear, is simply a matter of cold hard cash. While the country struggles across the board, the powers that be have seen fit to allocate what they call “coalition funding” to the tune of NIS6 billion.

For those unfamiliar, coalition funding has zero connection to government policy or the needs of the country. It’s a corrupt mechanism in plain sight, just a polite term for bribe money to keep the coalition partners from jumping ship. In the current crisis, a “responsible” budget would have cancelled all coalition funding and reallocated the funds where they are most needed.

Smotrich’s “responsible” argument collapses as soon as you understand that these coalition funds comprise an additional NIS 2.2 billion, for the Haredi (ultra-Orthodox) sector, rather than any broader economic or social imperative. Treasury officials and financial analysts were adamant that reducing or removing these allocations would materially reduce the financial pressure that has been used to justify cuts elsewhere. In other words, many of the cuts to key services would not have been necessary.

Staying with the Haredim (ultra-orthodox). They are receiving an additional NIS 1 billion for their education system, which operates independently of the state system. This takes their funding to more than NIS 5.1 billion. This is an education system where less than 4% of their pupils complete full matriculation (Bagrut) exams which includes core subjects (Maths, English, Science). Indeed, most Haredi schools do not teach the core curriculum at all.

This means the state is increasing support for an education system that leaves its young people at a terrible disadvantage, woefully ill equipped for modern life, the ability to enter the job market and to contribute to the economic future of the country.

Moreover, there was a cynical attempt to add a further 800 million shekels during the parliamentary process. It was a sneaky and underhand move, so much so that opposition MKs actually voted for it, as apparently they didn’t understand what they were voting for. Of course, that raises serious questions about the role of the opposition, which is a whole other topic.

But, the move was not just underhand. According to the Attorney General, Gali Baharav-Miara, it may be illegal, as it conflicts with existing Supreme Court rulings. The frankly sneaky manner of its submission appears designed to circumvent those rulings, which indicates both the political pressure driving the allocation as well as the total disregard this government has for the Supreme Court and the rule of law.

Israel has been at war for 912 days and counting, on multiple fronts. The Chief of Staff recently warned the government that the military is on the point of collapse, with a shortage of some 15,000 fighting soldiers. Reservists continue to show up for service at great personal cost. Conscripts have faced a period and intensity of fighting like no other, with no indication of how long this will continue. Once again, the north of Israel is under constant bombardment. Indeed, the entire country is under fire. Were it not for defence technology, safe rooms and bomb shelters, Israeli casualties would be in their thousands. The stress and strain of war is taking its toll on a general population showing incredible resilience.

Clearly, these are not this government’s key concerns. It is far more interested in placating its coalition partners, who point blank refuse military service. Who stubbornly maintain that, not only will they will not carry their share of the national burden, but they demand an ever larger, frankly obscene share of national resources. Desperate to keep them in the coalition so he can remain in power, Netanyahu will pay whatever price – or rather, is happy for the country to pay whatever price, necessary.

As such, the budget is constructed in such a manner that it rewards those who shirk their responsibilities and refuse to serve, while penalizing and demanding more from those who are carrying the load. This is not just irresponsible, it threatens the foundations, the security and the future of the modern Jewish state.

The same wilful blindness extends to the structure of the government itself, where for purely political reasons, a number of wholly superfluous government ministries have been created to provide coalition partners with ministerial positions. Newly invented ministries with grand titles such as Strategic Affairs, Regional Cooperation, Heritage, Social Equality, Settlements and National Missions – these are costing the country hundreds of millions, if not billions, of shekels. The ministers do little or nothing, while enjoying the trappings of their lofty position, while dispensing funds and jobs to their friends and allies. The treasury has pointed out where cuts should be made and the money that could be saved by closing these wholly unnecessary ministries. But they serve the needs of the coalition, which is all that matters. Indeed, rather than cuts, these ministries have seen budgets increased.

Settlement spending in this budget follows a similar pattern, although there is no single, discernible number. Funding is deliberately scattered across ministries to hide the total, which runs into the billions. In this budget, coalition funds alone channel circa NIS 737 million into settlements, alongside more than NIS 400 million for the Settlements and National Missions Ministry, Hundreds of millions more flow through security and infrastructure allocations. It is may not be the largest line in the budget, but it is one of the clearest examples of how money is protected when it serves political agendas.

The war has pushed the deficit beyond 5% of GDP. The government can legitimately argue that there is little or no choice. What they cannot do however, is ignore fiscal discipline and allow the allocation of all too scarce resources to be directed by self-serving political priorities rather than those of the country.

Strip away the language, the briefings and the justifications – with this budget, Netanyahu and his nearly “forty thieves”, live up to their name. They have looted the treasury, reached into the pockets of the those most in need, cut funding to core services already stretched to the limit, and paid off their coalition partners to give themselves another few months in power.

It’s a slap in the face to those sacrificing so much to keep the country going. It’s a betrayal of those who serve, of their families, and of the victims and their families. It is an insult to those who have lost their homes, who languish in an extended state of limbo. Northern border towns and communities, who are once again suffering extensive missile attacks, were promised significant funds to help rebuild and re-energise the area. But these funds will not materialise. Nor will the money promised to reservists, to victims and their families, or to residents on the Gaza border. It is a middle finger to fiscal discipline and responsibility. It is an abandonment of business and the self-employed.

This budget isn’t managing the country’s finances in its best interests. It’s a carefully planned, and ruthlessly executed heist.

Gary Cohen is a writer and filmmaker. His substack can be found here: