Israel passes budget with controversial cash for ultra-Orthodox

Israeli lawmakers passed an annual budget Wednesday with controversial allocations for ultra-Orthodox Jews, in a concession to religious parties in the governing coalition that drew protests from the opposition.

Thousands of Israelis marched through Jerusalem on Tuesday to demonstrate against the government's plans to hand more cash to ultra-Orthodox communities, accusing the coalition of "looting" state funds.

Prime Minister Benjamin Netanyahu announced earlier this week the state would grant married ultra-Orthodox men engaged in religious study rather than work a total of 250 million shekels ($67.5 million).

The grant was part of an agreement with United Torah Judaism, one of the ultra-Orthodox parties in the coalition, to ensure its support for the budget.

The extra funds are in addition to other budget allocations traditionally made to the ultra-Orthodox through various government ministries.

The 2023-2024 budget was ultimately passed early Wednesday with the support of all 64 coalition lawmakers in the 120-seat parliament.

Netanyahu and his allies -- who took office in December -- stood and clapped as the outcome of the vote was announced.

"We won the elections, we passed the budget, we'll continue for four more years," Netanyahu wrote on Facebook.

- 'Endless extortion' -

The premier spent recent weeks cutting deals with his ultra-Orthodox and extreme-right coalition partners, to meet a May 29 deadline to pass the budget or face fresh elections.

The cash handouts to the ultra-Orthodox have sparked anger as Israelis of all backgrounds contend with soaring prices and increased interest rates.

In the Tel Aviv suburb of Ramat Gan, hi-tech worker Sivan Aharon said: "It's sad that the taxes we pay are not redistributed to us.

"This money can be used to help the weakest populations, the soldiers, to go to health and education," the 38-year-old told AFP.

Opposition leader Yair Lapid said the budget amounted to "endless extortion" which failed to address the high cost of living.

"While you were sleeping, the worst and most destructive budget in the history of the country passed," the former premier wrote on Facebook.

Military service in Israel is mandatory for nearly all Jewish citizens and some minority groups, and lasts 32 months for men and two years for women.

While some ultra-Orthodox men enlist, most do not due to an arrangement that technically allows them to postpone their service for religious studies until their conscription orders expire. Religious women are exempt from military service.

Israel has about 1.3 million ultra-Orthodox Jews, representing 14 percent of the country's Jewish population, according to the Israel Democracy Institute (IDI) think tank.

Poverty rates among the ultra-Orthodox minority hit nearly 44 percent in 2019, compared with 22 percent in the general population, the IDI said.

While a majority of ultra-Orthodox women are employed, only 51 percent of men in the community have a job, it added.

- 'Broad agreement' -

The budget entails 484 billion shekels in government spendings for 2023 and 514 billion shekels for 2024.

Based on International Monetary Fund (IMF) gross domestic product projection for 2023, Israel is expected to run a deficit of less than 0.9 percent of GDP this year.

In 2022, the country ran a budget deficit of 0.7 percent of GDP, according to the IMF.

Asher Blass, a professor of economics at Ashkelon Academic College, said Israel needed more "growth engines" rather than "transfer payments" to ultra-Orthodox institutions that effectively discourage higher education.

Speaking ahead of the parliamentary vote, he told AFP "the trajectory is not good" but Israel has seen worse budget deficits.

The protest on the eve of the budget vote came amid a wave of demonstrations against the Netanyahu administration, focusing largely on its bid to overhaul the judicial system.

In his Facebook message on Wednesday, Netanyahu said "we will continue our efforts to reach an agreement as broad as possible on the judicial reform".

Weekly rallies held in Tel Aviv have regularly drawn tens of thousands of people who oppose moves to hand more powers to politicians and weaken the supreme court.

Israeli President Isaac Herzog has for nearly two months been hosting talks to seek a compromise on the divisive proposals.

The demonstrations in Israel's financial hub and elsewhere across the country have continued, despite the government pausing the judicial reform package following a general strike in March.