Israel’s Emergency Budget Shows Netanyahu’s Weaknesses

For the first time in Israel’s history, this week the government passed a budget in election year. Passage of the bill avoided immediately triggering elections and now means they will take place closer to the October deadline.

The NIS 850.6 billion (approximately £203.5bn) spending package is unprecedented in scale. Not only is it the largest budget in Israel’s history, but its defence allocations are the biggest ever agreed — a figure that reflects the acute security environment Israel now faces. Iran and its proxy armies, Hamas, Hezbollah and the Houthis, represent a clear and present threat not only to Israel but to the wider region and to British interests. Labour Friends of Israel’s latest publication, Unleashing Hell: Time to Ban Tehran’s Terror Army, outlines this threat posed by Iran.

Yet even as Israel’s military engages in conflict on multiple fronts, Netanyahu’s government has found ways to divert resources elsewhere. Ultra-Orthodox educational institutions received NIS 5.17 billion (£1.2bn), marking an increase over the previous budget by more than NIS 1 billion (£240.2m), according to one estimate. These increases come amid mounting frustration over widespread ultra-Orthodox draft-evasion and growing demands for universal enlistment — until 2024, Israel’s ultra-Orthodox citizens enjoyed a blanket draft exemption. By resisting pressure to expand recruitment, Netanyahu’s ultra-Orthodox allies have become increasingly politically isolated, both within the Knesset and among the broader Israeli public.

The arc of the budget negotiations reflected the vulnerable standing of the ultra-Orthodox parties. Initially, they sought to condition their backing on progress towards a new draft framework that would halt the conscription of students studying at religious Yeshiva schools and lower legal barriers to delivering community subsidies, which the Supreme Court had ruled as unlawful in 2024. Yet, after earlier attempts at passing such a conscription bill collapsed amid criticism that it did not recruit enough ultra-Orthodox, the two parties resolved to support the budget in exchange for pledges concerning a possible future draft bill. This dramatic reversal of negotiating terms highlights the lack of political options facing the ultra-Orthodox parties, underscoring not only their unpopularity, but also that of the political considerations shaping Israeli government priorities.

A further indictment of the government’s priorities and its attitude towards the rule of law came in the form of a deceptive maneuver used to unlock frozen ultra-Orthodox funding. By camouflaging a budget amendment as a routine procedural measure, the coalition earned the unwitting support of opposition lawmakers in activating funding for ultra-Orthodox communities previously frozen by legal authorities. This tactic was later described by the attorney general, Gali Baharav-Miara, as an attempt to circumvent legal oversight and recent rulings by Israel’s High Court of Justice. She has since moved to block the NIS 800 million transfer (£191.2m). Israel’s independent legal institutions, the Supreme Court and the attorney general, continue to function as intended and push back against these manoeuvres, despite attempts by right-wing politicians to weaken judicial independence.

Meanwhile the leader of the opposition, Yair Lapid, and our sister party leader, the Democrats’ Yair Golan, continue acting to preserve institutional guardrails, leading the charge against the coalition’s attempts to disregard legal guidance and court rulings. They represent the Israeli centre and left, providing the best hope of revitalising Israel’s liberal democratic identity, and for facilitating real change with respect to Israel’s relations with the Palestinians and the wider region.

With current polling denying a ruling majority for either Israel’s current opposition or coalition, avoiding early elections amounts to a victory for Netanyahu. Whether he will honour his reported commitment to the ultra-Orthodox on a new draft bill is another matter. The Knesset is now in recess until 11 May, and there is speculation that Netanyahu would prefer to call early elections rather than face a vote on an unpopular conscription bill. If so, the pattern will be familiar: a prime minister manoeuvring for political survival, leaving Israel’s most pressing challenges unresolved.

But the Israeli government’s strategy does not reflect the values or the interests of most Israelis – as seen perhaps most shamefully in this week’s other significant political development, Ben Gvir’s shameful and immoral death penalty bill (thankfully it is at least widely expected to be struck down by the Supreme Court). A different Israeli government, one led by Israeli moderates, provides the best hope for substantive change: for Israel’s security, for the Palestinians, and for the prospects of wider regional peace. We, as progressives in Britain, must do everything we can to support those Israelis working towards that outcome.

Read LFI’s most recent report here: Unleashing Hell: Time to Ban Tehran’s Terror Army 

The post Israel’s Emergency Budget Shows Netanyahu’s Weaknesses appeared first on Progress.