In recent weeks, the protest movement against the Israeli government’s proposed legal reforms has taken a turn. Of late, some of the pro-democracy protesters have turned their focus to accusing the Haredi community of ‘stealing from the public coffers’ in light of various concessions made in the recently passed state budget. Billboards, giant protest signs, articles in the left-leaning Ha'aretz newspaper and speeches at demonstrations have all branded the governing coalition’s allocation of discretionary funds to synagogues and Haredi educational institutions as theft of public funds. From there, the road to inflammatory and antisemitic messages, such as accusing Haredim of 'sucking the blood of secular Israelis,' was not long.
The problem with this campaign is not only that it is toxic, but also that it distorts the facts and, most importantly, diverts attention from the main factor leading to the misallocation of funds to the Israeli public: the passivity of elected officials in the face of the Finance Ministry’s policy of austerity.
The first distortion made by the protesters is their portrayal of the Arnona Fund as a law designed to benefit Haredim. The fund was established last month as part of the governing coalition’s budget process. It transfers money raised from arnona, or local property taxes, from municipalities with high business property taxes to authorities that will build new residential apartments. It’s true, the fund is full of problems. The 'expropriation' of a portion of municipalities’ property tax revenue damages the autonomy of local authorities and their ability to provide services to their residents. If municipal governments need to be incentivized to build new apartments, the funding can come from the state budget.
In addition, the criteria established by the budget law result in distorted socioeconomic priorities. Some municipalities whose populations are economically weak, such as Be’er Sheva or Mitzpe Ramon, will be forced to pay into the fund, while more financially secure areas that simply lack dedicated business districts, such as Savyon (one of Israel’s most affluent municipalities), will receive support from the fund. Arab municipalities will receive little support from the fund due to barriers to new construction. Jewish municipalities in the West Bank will be exempt from payment.
It’s true that Haredi municipalities, among others, will benefit from this fund, but the current Haredi parties did not initiate its establishment. It was the Ministry of Finance that initiated it. The provision also appeared in drafts of budgetary legislation under the previous Minister of Finance, Avigdor Lieberman. Then, too, heads of local governments protested, and in the end the provision was removed from the final version of the budget law. There are plenty of grounds on which to argue that the Arnona Fund is not the right solution to the housing crisis, but presenting it as a giveaway to the Haredim is not one of them.
The second distortion is the portrayal of discretionary funds granted to the Haredi community as a 'theft of taxpayer funds.' What is missing from this claim is a sense of proportion. Haredi institutions received about 10 billion shekels ($2.8 billion) from a state budget of about 600 billion ($168 billion), mainly for Haredi educational institutions to budget for yeshiva students.
The Haredi way of life, which includes the study of some adult men in yeshivas, and the budgetary and legal support it has received over the years from various Israeli governments is a controversial issue. Some argue that public funds should not support Haredi institutions, or that Haredi institutions should receive less public support than they currently do. Among those who feel this way, there is a debate as to whether changes to the status quo should be carried out by consent or by coercion.
In any case, and contrary to claims made by some of the protesters, the funds allocated in the current budget do not change the status quo. They merely compensate for existing budget shortfalls in Haredi institutions caused by rising prices throughout the economy. The funds may also allow Haredi institutions to raise wages for teachers and stipends for yeshiva students in light of the increased cost of living in recent years and the prohibition against yeshiva students being employed.
There is a serious blind spot in the way that certain protesters have addressed this matter. The budget allocations to the Haredi community represent a small portion of the amount of money that would be needed to properly invest in the Israeli public. According to an analysis by Davar, the gap between public spending in Israel and the average of developed countries is about 100 billion shekels ($28 billion) per year. And if you look at civil spending alone, it is about 150 billion shekels ($42 billion). That’s 10 or 15 times the current allocation to the Haredi sector. The general public feels these missing investments every day in overcrowded classrooms, in long waiting times for specialist doctors or for passport renewals, in rising parents' payments for schools, in the increase in the price of basic products and services, and in the unmaintained roads in the periphery.
These investments were not withheld from the general public 'because of the Haredim.' They were withheld because of an extreme neo-liberal ideology, which prefers a low debt-to-GDP ratio and a low budget deficit over an economy that serves the needs of the public. Even in the years when there were tax revenue surpluses in Israel, such as in 2022, these surpluses were not reinvested in the public, due to legislation initiated by the Ministry of Finance that limits government spending. Although this legislation was approved by the Knesset, it is anti-democratic in essence, no less than some of the proposals for the method of appointing judges that have provoked such strong opposition.
Haredim operate within this same reality. Their 'sin' is that they have political power, with the help of which they are able to influence the economic reality and obtain funding for their institutions. The problem is that the political representatives of the other sectors of society, who can easily repeal the anti-democratic budget laws and ensure proper budgeting for the general public, prefer to invest their energies in promoting legal reform, or in anti-Haredi hate campaigns.
This article was translated from Hebrew by Nancye Kochen.
