WAR ON GAZA COST $68BN TO DATE: ISRAELI FINANCE MINISTER SMOTRICH

Fri 06 September 2024:

Israeli Finance Minister Bezalel Smotrich and senior officials in his ministry presented his proposed state budget for next year during a press conference on Tuesday, taking account of the ongoing war against the Palestinians in Gaza. The budget was presented after many weeks of difficult deliberations, during which Smotrich attacked senior officials in his ministry and excluded them from the discussions.

Smotrich’s proposed 2025 budget seemed like an economic austerity plan following the contraction of the Israeli economy due to the war in Gaza.

The war is the longest and most expensive in Israel’s history with about NIS 200-250 billion ($54bn to $68bn) in direct costs, he pointed out.

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His proposed measures include freezing income tax brackets, a freeze on public sector pay, freezing the minimum wage, a surtax on undistributed company profits and abolishing VAT exemption for tourists. “We are at war,” said the far-right minister. “But we will all win together on the economic front. Everyone is equally under the burden. No one will see less in their bank account, but yes, there will be freezes.”

He claimed that the budget deficit will be less than the expected 6.6 per cent, because it will rise in the coming months, but it will fall again making it less than the expected for the last quarter of this year. “As of now, we are still committed to meeting the deficit target for 2024 as we expect the deficit to be on a downward slope in the last quarter of the year.”

“I am proud of the way we are leading the economy during the last eleven complex months of the war. The results are good in terms of national resilience – the resilience of businesses, the stabilisation of the military and the support we have provided to those who are evacuated from their homes on the southern and northern borders.”

Israeli media outlets reported that it is not clear at this time whether Smotrich will be able to pass the 2025 budget, nor is it clear whether Prime Minister Benjamin Netanyahu is interested in it or whether the coalition parties have agreed to it.

-MEMO

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