Haredi Parties’ Key Budget Initiatives Cut Amid Political Deal Fallout

Following a legislative blitz dubbed a "deal" between Likud and Haredi parties, including laws on Torah study and freezing arrests of draft-dodging Haredim, a political drama unfolded beneath the surface involving critical budget cuts to Haredi factions. The government transferred nearly 40 million shekels to Haredi kindergarten teachers, but major funding plans for the sector were slashed.

Haredi parties, led by Shas, aimed to complete two main economic initiatives by the end of the Knesset term: raising salaries for teachers in unofficial Haredi education under the "New Horizon" reform and regulating funding for food voucher programs. In March, the state budget allocated 258 million shekels for food vouchers at Shas’s request, but government decisions required criteria aligned with Supreme Court rulings, delaying disbursement.

In late 2024, the government approved 590 million shekels annually to increase salaries for Haredi education workers, embedding this in the budget rather than as one-time funds. However, this sum was redirected to fund a new committee’s recommendations for IDF wounded veterans, costing about 2 billion shekels yearly. This reallocation cut 175 million shekels from the teacher salary fund this year and will reduce it by 570 million shekels annually starting next year, effectively nullifying the original salary increase.

Additionally, a 200 million shekel budget intended to support institutions educating draft-eligible students without resolved status remains unused due to stringent conditions. The quiet acceptance of these cuts by Haredi parties, now outside the coalition, is seen as an effort to avoid voter backlash.

The food voucher budget remains unspent because of disagreements over eligibility criteria, with welfare officials rejecting proposals that ignore earning capacity and discourage employment. The funds were to be transferred to the Welfare Ministry, but lack of consensus has left the budget inactive. Political tensions, including those involving Finance Minister Bezalel Smotrich, may have influenced these financial decisions, which have significant implications for future years.