The government has approved the 2026 budget during a recent cabinet meeting, as announced by the Prime Minister’s Office. The next step is for the budget to be presented to parliament for its initial vote.
Defense Minister Israel Katz and Finance Minister Bezalel Smotrich have agreed on the defense spending framework as the cabinet continues to debate the upcoming budget. This budget must be finalized by March, or else it could lead to new elections.
Defense spending for 2026 has been set at NIS 112 billion, according to the defense minister’s office. This represents an increase from the earlier draft that allocated NIS 90 billion.
Opposition leader and Yesh Atid chair Yair Lapid criticized the government for approving what he called “a budget of corruption and draft-dodging.” He pointed out that the budget aims to cover the 60 billion shekels lost due to Haredi draft evasion by increasing taxes on Israeli citizens. Lapid argued that the government did not consider shutting down unnecessary ministries or canceling corrupt coalition funds.
If Lapid were to lead the next government, he pledged to create a budget that would take money from the corrupt and those avoiding their duties and redirect it to hardworking citizens who pay taxes and serve in the army.
Former prime minister Naftali Bennett also expressed concerns about the budget, stating that it increases the cost of living for citizens.
Prime Minister Benjamin Netanyahu, during the cabinet meeting ahead of the budget’s approval, stated that the government is on track to deliver a budget that brings good news for the State of Israel. He also assured that this government will complete its full term.
Katz emphasized that the military will continue to address the needs of its fighters and reduce the burden on reservists. His office quoted him as saying, “We will continue to act decisively to reinforce the IDF and to fully address the needs of the fighters and to reduce the burden on reservists – in order to ensure the security of the State of Israel on every front.”
The high cost of war
The Israel-Hamas War has been financially burdensome for Israel, with the country spending NIS 100 billion in 2024 on conflicts with Hamas and Hezbollah in Lebanon. Israel has since entered into ceasefire agreements with both groups.
Smotrich’s office noted that the 2026 defense budget has seen an increase of 47 billion shekels compared to 2023, just before the war began. According to his office, Smotrich said, “We are allocating a huge budget to strengthen the army this year, but also one that allows us to return the State of Israel to a path of growth and relief for citizens.”
Innovation, Science, and Technology Minister Gila Gamliel (Likud) is expected to support the budget after reaching agreements with the Finance Ministry regarding an increase in funding and the allocation for the first astronaut training.