Israel parliament approves budget as hostage families protest in chamber

Jerusalem: Israel's parliament gave final approval to the long delayed 2025 state budget on Tuesday, in a turbulent session that showed how lawmakers and the country remain divided over the fate of hostages still held in Gaza and the wider political landscape.

Parliament, known as the Knesset, passed the budget by a 66-52 margin. Failure to approve the budget by March 31 would have triggered snap elections.

"This is a budget of war, and with God's help it will be a budget of victory," Finance Minister Bezalel Smotrich said moments before voting on the budget began.

The budget "addresses all the needs of the war — both on the front lines and the home front — until victory," he added.

The debate took place in a stormy sitting of the Knesset, where families of some of the hostages protested from behind a screen in a public gallery, holding up posters and photos of their loved ones. Opposition lawmakers held up signs in the main chamber with "59", the number of hostages still in Gaza since the Hamas attack on Israel on Oct. 7, 2023.

About 24 of the hostages are believed to be still alive.

Following the budget's approval opposition lawmakers shouted "shame", and opposition leader Yair Lapid called the legislation the "greatest robbery in the history of the state".

"You are stealing the money and the future of Israel’s middle class — the productive public that works, pays taxes, and serves in the army," he said in parliament, addressing Prime Minister Benjamin Netanyahu's governing coalition.

Ahead of the vote, security forces dragged away protesters who lay across the road leading to parliament to demonstrate over the hostages as well as recent moves to dismiss Israel's domestic intelligence agency chief and the attorney general.

"There is freedom of expression in the State of Israel, but no one is free to forcibly block the democratic process in the Knesset," said Amir Ohana, the Knesset's speaker.

Return to war

Israel's military resumed its campaign against Palestinian militant group Hamas in Gaza last week, shattering a two-month ceasefire. On Tuesday, the army told residents in all northern border towns in Gaza to evacuate, saying Palestinian rockets had been fired at Israel from the area.

The return to fighting has led to mass protests in Israel demanding a return to negotiations to bring back the remaining hostages and bodies.

Smotrich had hoped the budget would be approved by the end of 2024, but political infighting among coalition partners delayed the final vote.

The total budget will be 756 billion shekels ($206.5 billion), or 619 billion excluding debt servicing - a 21% rise in spending over 2024. The defence budget alone will be a record 110 billion shekels, while the deficit is set at 4.9% of gross domestic product.

The budget, which features a series of tax hikes aimed at preventing the deficit from becoming unsustainable while Israel finances its military conflict. In 2024, the deficit was 6.8% and led to credit rating downgrades.

Israel spent $31 billion on its military conflicts in Gaza and Lebanon in 2024, and the government vowed to sharply boost defence spending going forward.

Some $150 million will go to strengthen Israel's public diplomacy efforts, which Foreign Minister Gideon Saar said is a "is a crucial and life-saving issue, just like weapons on the battlefield".