After an overnight debate which lasted several hours, the Knesset plenum approved early Thursday morning the second and third readings of the Arrangements Law and the State Budget Frameworks Law, which together form the central economic legislative package for the coming year. The Arrangements Law was approved by a majority of 63 to 50. The Budget Frameworks Law was approved by a majority of 62 to 50, with one abstention. The Arrangements Law is an omnibus bill passed alongside the state budget, often containing economic reforms, regulatory changes, and government policies. It typically includes a wide range of provisions—such as tax adjustments, labor laws, and privatization measures—aimed at streamlining governance and implementing fiscal priorities. In accordance with the legislation, the budget deficit ceiling for 2025 will be raised to 4.7% of GDP, and the permitted government expenditure will increase by approximately 70 billion shekels, representing a 13.6% increase compared to the base budget for 2024. Finance Minister Bezalel Smotrich said during the discussion which preceded the vote, "We are addressing all needs, supporting reservists on an unprecedented scale because they deserve it. Those who serve - receive. We are steering the Israeli economy through the longest and most expensive war in its history, and contrary to your chatter, reality speaks—the Israeli economy is strong and stable. The budget includes massive sums for reservists, for the rehabilitation of the south and north, and significant, important funds." During the discussion, Prime Minister Benjamin Netanyahu was evacuated from the plenum to shelter as a result of the missile which was launched from Yemen, and which triggered sirens across central Israel and Jerusalem. As he left the plenum, the Prime Minister told a Channel 14 reporter, "The Houthis are paying—and they will pay more." Related articles: Otzma Yehudit, coalition reach agreement on Arrangements Bill Budget for 2023-2024 passes first reading in the Knesset Government to begin regulating status of young settlements Young Settlement Forum to Ministers: "Now it's up to you" Smotrich continued his speech even during the sirens, saying, "With God’s help, we will achieve a great victory and deliver a budget for growth and infrastructure. We will win the war and reward the reservists." Opposition leader MK Yair Lapid criticized the legislation, stating, "If Israel’s economic situation has never been better, why did you raise taxes? If you weren’t distributing millions in coalition funds, you wouldn’t have needed to raise VAT, and every Israeli citizen wouldn’t see prices rising at the supermarket. You raised taxes not because of the war, but to spend the money on yourselves."
