JNS
"Security also depends on the economy. We can't have a strong army if we don't have a way to finance it," the Israeli prime minister said.
Israel's government met on Thursday morning in Jerusalem to vote on a 2005 state budget, in a discussion expected to last hours.
The budget has elicited criticism for its deep cuts across the fields of health, education, social services and transportation.
The Ministry of Defense has been allocated 102 billion shekels ($27.4 billion) for 2025. However, it reportedly would like the number to be larger by roughly 30-40 million shekels (~$8-11 million).
"Our security also depends on the economy. We cannot have a strong military if we have no way of financing it," Israeli Prime Minister Benjamin Netanyahu said in his opening remarks at the meeting.
"If it is possible to strike the heart of our cities, our industry and our citizens, then it is clear that our economic capability will be harmed. Therefore, security and the economy are interdependent," he said.
"It is clear that the war has costs, very heavy costs, not just in lives but also materially, and this is self-evident. But for a country that has been attacked on seven fronts, the Israeli economy has shown extraordinary resilience, which is a result of the free economy that we have built here, the sense of initiative instilled in our people and the rallying of our citizens," he said.
Referring to the proposed cuts, the prime minister said, "It is clear that there is no economy without limits. There is no economy without restrictions. If you give to one place, you unfortunately need to take from another.
"There are ways to do this. We will discuss this at the present meeting and I assume that by the end of today, or early tomorrow, we will conclude our deliberations and have good news for the State of Israel, Israel's security and the Israeli economy."
Finance Minister Bezalel Smotrich said, "In the last year of the war, our unequivocal policy was 'the economy is mobilized for security.' I am convinced that the security that will come with God's help after the victory, that we'll return to an economy with fantastic returns and with many, many years of growth to come."
He described the budget as "complex," but said the costs are spread equally so that "no one feels that their world has collapsed on them."
As the country has stood steadfast in the war effort, so it will stand fast in the "economic war," Smotrich said.
Proposed budget cuts include: 275 million shekels (~$74 million) from the Ministry of Health; 200 million shekels (~$54 million) from the Ministry of Agriculture; 113 billion shekels (~$30 million) from the education budget; and 100 million shekels (~$27 million) from the Ministry of Welfare and Social Affairs.
Additionally, the budget says that five government offices will be closed, with the list to be drawn up by the Prime Minister's Office.
The budget also cancels the exemption from the value-added tax (VAT) for tourists. Tourists will pay 18% VAT, as will Israeli citizens starting in 2025. The Finance Ministry expects the VAT to bring in 2.5 billion shekels (~$670 million) annually starting in 2029. The Tourism Ministry has expressed its opposition to the idea.
The budget also cancels tax benefits for foreign and Palestinian-Arab workers.
Nurit Yohanan, Palestinian Affairs correspondent for Kan News, reported that this will result in the transfer of more money to the Palestinian Authority. "In 2025, at least 43 million shekels [$11.5 million] will be transferred, instead of 7.2 million [$1.9 million]," she tweeted.
