Israel's 2025 budget approved; final vote due soon

Israel's parliamentary finance committee has approved the state budget for 2025. This decision sets up a final vote in the Knesset before March 31, which is crucial to avoid government collapse. The approval came after a lengthy 13-hour debate. Opposition members criticized the government for its lack of transparency regarding budget spending. The Finance Ministry noted that certain funds are not included in the budget because they are not subject to a government decision yet. The total budget for 2025 is set at 756 billion shekels, approximately $203.5 billion. This represents a 21% increase from 2024, excluding debt servicing. The defense budget will be a record 110 billion shekels. The planned deficit stands at 4.9% of the country's gross domestic product. In 2024, Israel spent around $31 billion on military conflicts in Gaza and Lebanon. The government promises to increase defense spending in the future. If the budget is not approved by the end of March, it could lead to snap elections. However, there seems to be little risk of a government collapse. Finance Minister Bezalel Smotrich aimed to finalize the budget by the end of 2024. Political disagreements within the coalition delayed the process. The budget includes several tax increases intended to address the deficit, which was 6.8% in 2024. Committee chair Moshe Gafni called the budget challenging but noted efforts to reduce many proposed taxes to ease the burden on citizens. Opposition member Vladimir Beliak labeled the budget "socially and morally disastrous." He warned that credit rating agencies are reviewing the budget, with the possibility of further downgrades for Israel.