What it is about
Due to unpredictability in the arrival and amount of US aid, Israel’s Ministry of Finance chose to refrain from including this aid in its latest budget expansion for 2024. This could require further budget adjustments down the line.
Why it matters
The uncertain US aid means Israel must remain adaptable in its financial planning, especially amidst the increased demands brought on by the ongoing Israel-Hamas conflict. Ensuring financial stability and continued support for evacuees is a priority for the Israeli government.
Driving the news
Finance Minister Bezalel Smotrich’s proposed expansion of the 2024 budget by approximately NIS 3.4 billion was discussed in a Knesset Finance Committee meeting. Limitations were recognized due to the uncertain timeline and amount of US aid, illustrated by Yoav Hecht from the Finance Ministry’s Budget Division.
The Details
Due to unpredictability over when and how much US aid will be received, the Ministry has chosen not to rely on it in the expansion of the 2024 budget. An urgent amendment is necessary to maintain aid to evacuees and manage other war-related impacts effectively.
What They’re Saying
“The risk that not all the aid [from the US] will arrive is almost certain. The question is how much will arrive – this is uncertain,” Hecht emphasized. Implementing the current amendment is seen as the ideal approach, despite potentially needing to reopen the budget again in the future.
Broader Context
The necessity of this expansion stems primarily from unanticipated war expenses. Continued fighting requires additional funding beyond the initially prepared budget, according to Hecht.
The Other Side
The expansion has faced criticism from MK Vladimir Beliak of Yesh Atid, who argued that necessary funds could be sourced by reducing government and coalition expenses instead of expanding the budget. Additionally, former Bank of Israel governor Karnit Flug criticized the government’s partial cuts to coalition funds amidst other war-related financial needs.
Bottom Line
Israel’s dynamic budget strategy, led by Finance Minister Smotrich, demonstrates the government’s commitment to financial responsibility amid complex circumstances. Despite facing criticism, the Ministry of Finance is actively navigating uncertainties to secure national stability and continued support for those affected by the conflict.
This story was first published on jpost.com.