Israeli Finance Ministry Warns Torah Study Basic Law Could Harm Economy and Reserve Duty

The Israeli Finance Ministry has issued a warning regarding the proposed Basic Law on Torah Study, cautioning that it could significantly damage the economy, increase the burden on reserve soldiers, and weaken incentives for ultra-Orthodox recruitment into the Israel Defense Forces (IDF) and their integration into the workforce. This warning was detailed in a legal opinion submitted by the ministry's legal advisor to the Knesset committee ahead of the bill's second and third readings.

The ministry noted that the bill's broad language currently makes it impossible to precisely estimate its fiscal impact. However, if the law is interpreted to prioritize Torah study over other constitutional values such as equality, it could justify expanded budgets and benefits for Torah students, potentially altering the state's priority framework.

The Finance Ministry highlighted an immediate shortage of approximately 12,000 mandatory IDF soldiers and stated that continued reliance on the reserve forces is unsustainable. The cumulative economic cost of reserve service from 2023 to 2026 is projected at around 170 billion shekels, with the state's direct budgetary expenditure on reserves estimated at about 115 billion shekels.

Approval of the law could lead to increased subsidies for Torah students, including daycare support, housing benefits, land allocations, and other assistance. The ministry warned that such expansions would undermine efforts to boost ultra-Orthodox enlistment and workforce participation, potentially resulting in slower economic growth, reduced tax revenues, and diminished capacity to provide public services over the long term.