In the 1984 Knesset elections he was on the Alignment's Knesset list, but failed to win a seat. However, when Aharon Harel resigned from the Knesset in May 1988, Shochat replaced him. He retained his seat in elections in November that year, and became chairman of the Finance Committee and the Economic Affairs Committee. After being re-elected in 1992 (by which time the Alignment had become the Labour Party), he was appointed Minister of Finance by Yitzhak Rabin. Although he was re-elected again in 1996, the opposition Likud won the election and Shochat lost his ministerial position.