Israel Slashes Civilian Budget by $3.5 Billion Ahead of Elections
Translated & summarized from Calcalist by baba
The Israeli government has approved a NIS 3.5 billion transfer from civilian programs, including those for the Arab community, to the defense budget just weeks before elections. This move, officially to cover helicopter deal funding gaps, highlights a pattern of prioritizing defense over civilian needs, despite Israel's already low civilian expenditure compared to developed nations. The cuts disproportionately impact the Arab sector, considered a key growth engine, while coalition-aligned funds remain protected. The article criticizes the lack of public outcry, contrasting it with protests in other countries over similar service reductions.
The story in 6 lines · by baba
- Israel's government is transferring NIS 3.5 billion from civilian programs to the defense budget before elections.
- The cuts primarily affect development plans for the Arab community, impacting education and infrastructure.
- Israel's civilian spending is significantly lower than the OECD average and peer nations.
- The Aharon Institute identifies the Arab community's integration as a major growth driver for Israel.
- Coalition-aligned funds, including those for ultra-Orthodox education, are largely protected from cuts.
- The article contrasts Israel's public acceptance of service cuts with protests in France.
The Israeli government approved a NIS 1 billion transfer from the three-year development plan for the Arab community to the defense budget, with an additional NIS 2.5 billion in across-the-board cuts expected. This amounts to a total of NIS 3.5 billion being diverted from civilian sectors, impacting education, health, and infrastructure. The official reason cited is a funding gap of approximately $288 million for Apache helicopter deals with Boeing.
The article argues that the deeper reason is a pattern where the government consistently targets civilian spending, particularly programs for the Arab sector that lack strong coalition backing, when quick funding is needed. Such significant cuts just two weeks before elections, it contends, would normally be a major campaign issue in a functioning democracy but have passed with virtually no public discussion or protest in Israel.
Israel's civilian expenditure as a percentage of GDP in 2023 was 31.1%, significantly lower than the OECD average of 41.2%. Even when compared to peer nations like Austria, Denmark, and Sweden, which spend an average of 46.4% of GDP on civilian needs, Israel falls short by over 15 percentage points. This structural deficit predates the current war and economic downturn.
The cuts disproportionately affect programs aimed at integrating the Arab community, which research suggests is Israel's greatest potential lever for economic growth. The Aharon Institute for Economic Policy estimates that integrating the Arab population into employment and human capital could boost annual growth by 0.4 percentage points. The diverted funds were intended for education, training, transportation, and infrastructure, precisely the areas crucial for this development.
This is not the first time funds for the Arab community have been targeted. Previous instances include Finance Minister Bezalel Smotrich's demands to cut funds for yeshiva scholarships and his freezing of funds for Arab municipalities, which he termed "political money." In January 2024, a 15% cut was applied to development programs for the Arab community for 2024-2026. Meanwhile, coalition funds, including significant allocations to ultra-Orthodox and Sephardic education networks and the Ministry of Settlement, remain largely protected.
The article contrasts this with France, where public protests erupted over issues like teacher shortages and large class sizes, despite France's civilian spending being 54.2% of GDP. It suggests that while Israeli society has become accustomed to underfunded public services, leading to a lack of public outcry when they are further reduced, other nations react strongly when their social contract is threatened. The current fiscal climate, marked by high public debt and rising financing costs, makes such spending decisions even more critical.
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