Israel ministries take budget cuts to aid war, government approves updated war time budget 2024

Benjamin Netanyahu. Pic/AFP

The Prime minister Benjamin Netanyahu led Israel government approved the amended budget 2024 state budget despite overcoming opposition by within his own government. The Finance Ministry said the government has approved an updated wartime budget for 2024, with significant increases in defence spending amid the raging fighting with Hamas in Gaza.

The updated budget, which needs parliamentary approval, was set at 582 billion shekels ($155 billion ), including an extra 55 billion shekels for defense to cover combat expenses and strengthen the army.

The original budget for 2024 was approved by Parliament in May 2023, but the war that began following the October 7, 2023 Hamas attack prompted a new budget to cover the higher costs, IANS reported citing Xinhua news agency.

The Ministry said all ministries' budgets were cut because of the high military spending. Israel's Ministry of Transportation said that as part of the meeting to approve the 2024 state budget and in light of the ongoing war in Gaza, it agreed to cut its budget and pledged to finance the war and the reconstruction of the Gaza Strip. However, the ministry said it is preserving what it called the "main projects to maintain transportation continuity" such as the "Connecting Israel" rail project, safety baskets and dedicated budgets for the repair of red (emergency) roads and budgets for the restoration of transportation infrastructure in the areas near Gaza, ANI reported.

IANS report said that the National Unity ministers in Israel, the largest opposition faction that joined the war cabinet after the conflict started, voted against the budget, arguing that the new budget "does not reflect the necessary fundamental change of priorities and ignores the heavy consequences of the war". The faction demanded closing unneeded ministries, freezing the law that allows ministers to resign from parliament to add new lawmakers, freezing lawmakers' salaries, and cutting funds for coalition parties.

According to the Bank of Israel, the war is costing the Jewish nation's economy $600 million a week due to work absences. This is equivalent to about 6 per cent of the weekly GDP. On the other hand, Israel's treasury minister said the daily direct cost of the Gaza war to her country is about $246 million, the IANS report adds.

(With inputs from IANS and ANI)