A special Labor Party team decided on the "red lines" the party would set ahead of the cabinet and Knesset votes on the budget.
According to the decision, Labor would insist on three main principles: Education reform, welfare services and a significant increase in the defense budget.
The budget proposal is set to be presented to ministers on Sunday.
Meanwhile, Labor Chairman Ehud Barak called for a rise in pensions and said he would work to link them to the country's average salary.
Barak was speaking during a Labor faction meeting at the party's headquarters.