This law was passed specifically to allow Aryeh Dery to ignore the terms of his plea agreement and serve as a minister. It's not related to the Jewish-Arab demographic balance (which, within the 67 borders, is about 85-15).
https://en.wikipedia.org/wiki/List_of_Israeli_public_officia...
Even if the law passed now might have only the tactical goal of promoting Aryeh Dery once more, it certainly will allow the government to do unsanctioned in the future other things that could be much more harmful.