Israel passes budget with record-breaking defense spending

Knesset votes to pass Israel’s largest-ever spending plan, including record-breaking military budget, less than two days before deadline.

By World Israel News Staff

The Knesset approved the government’s state budget plan early Monday morning, following a marathon session overnight, missing the statutory deadline by less than two days and avoiding the automatic dissolution of the Knesset and snap elections.

The state spending plan passed in the Knesset plenum by a vote of 62 to 55, clearing the way for a record-breaking budget of 850.6 billion shekels ($270 billion).

The overnight session was marked by opposition delays, missile sirens, and a last-minute political push by the coalition to avoid triggering early elections.

The new budget was heavily shaped by the ongoing war, with defense receiving an unprecedented allocation. The Defense Ministry is set to receive 143 billion shekels ($45.4 billion) directly, alongside additional income-dependent spending and long-term commitments that push the broader defense package far higher.

The government had already imposed a 3% cross-ministry cut on civilian ministries, excluding defense, to help finance added wartime costs.

Beyond defense, the largest allocations went to education, the National Insurance Institute, and health. The Education Ministry is slated to receive just over 97 billion shekels ($30.8 billion) for the public school system, plus nearly 14.9 billion shekels ($4.73 billion) for higher education.

The National Insurance Institute is due about 64 billion shekels ($20.3 billion), while the Health Ministry is set to receive roughly 63 billion shekels ($20 billion). The budget framework also raised the 2026 deficit ceiling to 4.9% of GDP.

Opposition lawmakers denounced the budget as sectarian and politically motivated, condemning allocations for Israeli communities in Judea and Samaria, including 400 million shekels ($127 million) for the Settlements and National Missions Ministry and 800 million shekels ($254 million) earmarked for the ultra-Orthodox sector, including stipends to yeshiva students.

MK Yair Lapid, leader of the opposition, condemned the budget as an act of wartime “looting.”

“There’s never been anything like this in the history of the Knesset,” said Lapid on his X account on Monday. “This is a collection of lowly thieves who are disconnected from the people, who are looting the citizens of Israel while they’re in bomb shelters.”

Finance Minister Bezalel Smotrich (Religious Zionist Party) defended the budget bill and accused lawmakers who opposed the wartime spending plan of undermining Israeli security.

“We are passing this budget under a right-wing government that will serve out its full term and complete its mission in security, the economy, and in reforming the judicial system,” Smotrich told MKs shortly before the vote.

“Anyone who votes against the budget is voting against Israel’s security, against tax relief for working people in Israel, and against taxation of the banks.”