The government approved the 2026 budget at a cabinet meeting on Friday, the Prime Minister's Office said.
The budget will head to parliament for its initial vote and must pass by the end of March, or early elections will be initiated.
The defense budget for 2026 has been set at NIS 112 billion, Defense Minister Israel Katz’s office said, significantly less than what the military had initially sought but up from the NIS 90b. that Finance Minister Bezalel Smotrich had demanded.
Opposition leader and Yesh Atid chair Yair Lapid said the government is approving “a budget of corruption and draft-dodging.”
“To cover the NIS 60b. that haredi [ultra-Orthodox] draft evasion costs, they are raising taxes on the citizens of Israel.
They did not even consider, for a moment, shutting unnecessary government ministries or canceling the corrupt coalition funds,” he said.
Lapid pledged that if he were to lead the next government, it would pass a budget that “takes money from the corrupt and the shirkers, and transfers it to the people who work hard, pay taxes, and serve in the army.”
Former prime minister Naftali Bennett also criticized the budget, arguing that it increases the cost of living for citizens.
Prime Minister Benjamin Netanyahu said at the cabinet meeting ahead of the budget’s approval that “we are on track to deliver a budget – a budget that brings good news for the State of Israel.”
He also assured that this government would serve out its full term.
Katz said the military will continue its to address the needs of its fighters and reduce the burden on reservists.
“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,” his office quoted him as saying.
The high cost of war
The Gaza war and its related conflicts have been costly for Israel, which spent NIS 100b. in 2024 on its fight against Hamas and Hezbollah.
Israel has since entered ceasefire deals with both terrorist groups.
Smotrich’s office said that the 2026 defense budget has seen an increase of NIS 47b. compared to 2023 on the eve of the war.
“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,” Smotrich said.