Carbon tax, electric vehicle travel tax and fuel hikes: the decrees left out of the 2024 budget

The revised budget law for 2024 was passed alongside a balancing plan, but a large part of the budget decrees were left out. The Knesset’s legal adviser, attorney Sagit Afik, prevented linking the balancing economic plan to the vote on the budget (from the “Law of Arrangements” format), and determined that all of them would go through a normal legislative path. In doing so, Afik restored to the Knesset its power vis-à-vis the government, and especially to the Finance Committee headed by “As Moshe Gafni (Torah Judaism).

The decrees that remain outside the budget and will be promoted in regular legislation are a carbon tax, a travel tax on electric vehicles, increasing the price of refueling at automatic facilities, an increase in the purchase tax on apartments and the obligation to report on renting apartments. Gafni did not explicitly speak out against them, but avoided bringing them to the committee’s discussion.

Some of the cuts in the budget were not approved by the Finance Committee, including some of the cuts in the Arab Society’s budgets, which are included in the definition of “national priority”. The total impact of these decisions on the 2024 budget is not high, but their weight will increase in the following budgets, since these are long-term decisions.

According to the Ministry of Finance, the lack of discussion of the proposals harms his credibility as a policy maker. On top of that, this could violate his promises to the international rating agencies regarding the effect of the decrees on the deficit. However, according to a source in the capital market, the most influential factor on rating decisions is the security situation, so a deviation of a few billion shekels in the deficit should not be what changes a rating decision.

“This is unimaginable irresponsibility on the part of the coalition that will increase financial instability, and almost certainly further downgrade the credit rating of the State of Israel,” MK Vladimir Blayak (Yesh Atid), a member of the finance committee, tells ‘Davar’ regarding the unapproved cuts. In the Arab Society’s budgets, Blaik says: “I am against the cuts in the 549 plan. Certain cuts in the 550 can be considered, with the aim of preventing as much harm as possible to long-term projects.”

Resolution 549 concerns the treatment of the phenomenon of crime and violence in Arab society, while Resolution 550 is a five-year plan of approximately NIS 30 billion, which should be cut by approximately 15%.

MK Gafni did not respond to the statements.