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Israel plunders its own treasury to prepare for a far-right future

New budget boosts ultra-Orthodox schooling, projects promoting 'Jewish identity' and settlements at expense of most vulnerable sections of society
Israeli soldiers secure the construction site as Jewish settlers work at a seminary that was built overnight in the West Bank outpost of Homesh, on 29 May (AP)
Israeli soldiers secure the construction site as Jewish settlers work at a seminary that was built overnight in the West Bank outpost of Homesh, on 29 May (AP)
By Lily Galili in Tel Aviv, Israel

A few minutes after the Israeli parliament approved the budget for the next two years, a triumphant Prime Minister Benjamin Netanyahu was quick to announce: "It's a great day for the people of Israel."

It is not. It might be a great day for Netanyahu himself; it's certainly a very bad day for most Israelis. The money allocations  - 484bn shekels ($130.4bn), in 2023, 514bn shekels in 2024) solidify an ultra-nationalistic, orthodox Israel, forsaking even the appearance of social justice. Unless, of course, you consider food stamps for members of the ultra-orthodox Shas party social justice in 2023.

About 300 top economists, among them former senior Bank of Israel and Treasury officials, warned in a letter that this kind of budget poses an "existential threat to Israel's future".

As Arie Krampf, political economist at the Academic College of Tel Aviv Yaffo, notes, the parties within Netanyahu's government gave themselves more money for political pursuits "at the expense of the weaker sections of Israeli society".

"Civil expenditure in Israel is lower compared to other OECD [Organisation for Economic Co-operation and Development] countries. The new budget is a combination of neoliberalism and designated payments to coalition parties, with no growth mechanisms, which is bad news for the Israeli economy," he told Middle East Eye

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A short illustration: money allocated to political parties for their own projects reached 14bn shekels. In comparison, Israel's collapsing public hospitals got just 12.4bn.

However, the budget is not only bad; it is also anti-democratic. Even before the government has managed to achieve its goal of fundamentally changing the Israeli political system through its controversial judicial reforms, the budget has already done it.

The new budget is today widely described as "looting the public treasury". That is what headlines in Israel say, that is what all opposition leaders call it. Avigdor Lieberman, head of the opposition Yisrael Beiteinu party, defined it "a black stain in the history of Israel".

This is only one way to look at it. In fact, the new budget is a more sophisticated way to secure long-term, far-right nationalistic education to future generations, maintaining conservative and reclusive orthodox communities and creating future voters infused with a hardline notion of the Jewish state.

That is the real meaning of the unprecedented billions allocated to orthodox parties and even more so to the far-right parties Religious Zionism and Jewish Power, as well as the ministries they control. The immediate by-product is perpetuating the occupation, strengthening it now and expanding it in the future.

Israeli settlers erect a structure for a new Jewish seminary school, in the settler outpost of Homesh in the Israeli-occupied West Bank 29 May (Reuters)
Israeli settlers erect a structure for a new Jewish seminary school, in the settler outpost of Homesh in the Israeli-occupied West Bank 29 May (Reuters)

This aspect of the budget went almost unnoticed. All attention and anger focused on the wild demands of the orthodox parties and the way Netanyahu caved into their unprecedented demands. That's the very same Netanyahu who in 2003, as the then finance minister, fiercely opposed welfare benefits.

"He who cannot afford it shouldn't have 12-14 children," he then said. "The policy of government benefits is what keeps people out of the labour market and in a perpetual cycle of poverty."

Twenty years later, eager to preserve his coalition and stay in office at all costs, he changed his mind. The billions transferred now to child benefits and the ultra-orthodox educational system, which is totally free from any state supervision and ideologically refuses to teach core subjects such as mathematics or English, will foster generations unfit to integrate into the labour market but certainly fit to keep their benefactors in power.

Other segments of Israeli society have long been angry at the way the ultra-Orthodox community relies on state handouts but pays barely any tax and refuses to serve in the military. With a huge new payout, that anger has turned into resentment and rage.

The Kohelet Forum vision

Yossi Dahan, head of the Human Rights Division at the College of Law and Business, says that, in many respects, the budget is realizing the vision of the Kohelet Forum, an ultra-conservative think tank primarily funded by two American billionaires. Billionaires, one should add, who are backing Israel's judicial reforms and are patrons of Finance Minister Bezalel Smotrich.

"Democratic regimes based on social justice give priority to funding of public education. In Israel, the government is to unconditionally fully finance the ultra-orthodox schooling system, the system with a long legacy of discrimination of against children of Sephardic origin," Dahan says.

"Private schools publicly funded will grow on the ruins of public education. They will naturally prefer low-cost students from well-off families with no costly special needs. That's the Kohelet vision."

The growing resentment of secular Israelis towards the ultra-Orthodox diverted their attention from issues that are certainly no less important.

If the Orthodox parties are taking Israel backwards socially and educationally, the religious far right in the coalition is out to take Israel forward their way.

Israel: The 'extreme' right-wing think tank behind the judicial overhaul
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They aren't waiting for the judicial reforms to implement the profound change they want; the budget is a good enough tool to shift the intricate balance in the definition of Israel as a "Jewish democratic state".

Forget the democratic. Look at the money now allocated to make Israel more "Jewish". Far-right Minister of National Missions and Settlements Orit Strook, of the Religious Zionism party, was granted 280m shekels to "strengthen Jewish Identity". That included 120m for Jewish culture, and another 80m for Jewish identity. 

Do not feel bad if you fail to understand; nobody does. That cash, by the way, is on top of the almost 200m she already has to help families of the religious right wing settle in mixed communities where Jews and Palestinians live together.

It's more than likely these changes in mixed communities will make life even less happy there, but it is a scheme that fits as part of the Israeli government's "national mission" to Judaise as much of the country as it can.

Restricting Palestinians is also an important part of this plan. Strook's ministry has acquired an extra 40m shekels (double the former budget) to buy special equipment like drones to monitor Palestinian construction in Area C, the 60 percent of the occupied West Bank completely controlled by Israel.

As if that wasn't enough, Avi Moaz, the racist and homophobic leader of the Noam party, has resumed his role as a deputy minister in the prime minister's office after walking out a few weeks ago. He's been given a budget of 285m shekels to - you guessed it - safeguard Jewish identity.  

Prepare for a settler influx

While the budget negotiations were in full swing earlier this month, Smotrich instructed authorities to develop infrastructure in preparation for the arrival of 500,000 more Jewish settlers in the West Bank.

It is certainly no coincidence that this announcement arrived around the time of budget negotiations. Those who ask where the money to develop deprived and peripheral areas has disappeared to are missing the point: illegal Jewish settlements are now the focus of the national project.

This shift in focus hasn't happened overnight, but this budget is more settler-orientated than ever.

With the soaring cost of living in Israel now, West Bank settlements and outposts that enjoy unparalleled support from government funds are bound to attract more settlers to enjoy a higher standard of living.

'The new budget is a combination of neoliberalism and designated payments to coalition parties'

- Arie Krampf, political economist

Israeli neoliberalism and efforts to annex the West Bank have merged into one agenda.

Just recently, alongside the budget, the Israeli parliament discussed a new bill named the "municipal tax fund". The concept behind it is simple: the government takes some of the earnings of wealthier local authorities from municipal taxes and redistributes them to weaker municipalities.

Sounds almost like a Robin Hood tale. Only it is not. What it really means is another transfer of power from local authorities to the government, which can decide where that money ends up.

This scheme to give more power to the government at the expense of democratic institutions is exactly what the judicial reforms are all about. Seizing municipal funds is a tactic previously used by Hungary’s Viktor Orban.

And who will be the main benefactor of this controversial move? The settlements in the West Bank, of course. Due to their international legal status - or, rather, illegal status - they cannot contribute to the fund themselves, but they can get money from it. And they will, if the bill passes.

This article is available in French on Middle East Eye French edition.

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