Government Approves 70 Billion Shekels in Military Procurement Without Clear Funding Source
The Ministerial Committee for Procurement has approved IDF commitments worth 70 billion shekels ahead of elections. The decision requires the expenditure to be included in the 'numerator' mechanism, forcing the government to identify specific budget sources.
Against the backdrop of security threats and the need to equip the army, the Ministerial Committee for Procurement has approved IDF procurement commitments worth approximately 70 billion shekels just before the elections, Globes has learned. However, the Ministry of Finance has added a significant condition: the procurement must be included in the 'numerator' mechanism, which requires the government to present an actual budget source for these massive commitments.
Where will the money come from?
Last year, Prime Minister Benjamin Netanyahu decided to budget army equipment at approximately 350 billion shekels over a decade. Tens of billions are expected to come from internal efficiency measures within the IDF and the sale of defense companies, with the remainder from the state budget. The committee had previously approved the purchase of squadrons at a cost of 40 billion shekels.
Initially, Ministry of Finance sources warned that this would require "imposing taxes on a scale that would lead to the suppression of the Israeli economy." Later, as part of a classified summary distributed by the National Security Council (NSC), it was decided to spread the plans over 13 years to ease the burden on the state treasury. In 2027, 3 billion shekels will be allocated, gradually rising to a peak of 25 billion shekels per year in the next decade.
Who will pay the price
This step comes during an election period, potentially constraining the next government with massive security expenses. The defense establishment maintains that this is an immediate necessity given the tensions with Iran and open fronts in Lebanon, Syria, and Gaza.
Adjusting the budget to these expenses is complex. The country's debt-to-GDP ratio has reached nearly 70%, and state interest payments last year totaled about 40 billion shekels—more than the entire budget of the Ministry of Transport. The Bank of Israel and the International Monetary Fund advise against reducing civilian expenditures, which are already low compared to OECD countries, and recommend focusing on debt reduction.
Lack of efficiency
These issues are not merely budgetary. In April, Globes reported that reserve duty requirements for soldiers have reached approximately 100 days per year. While the IDF cites a directive of 9 weeks, the reserve system appears strained. The economic cost of reserve recruitment is immense; in 2025 alone, wages and grants totaled 27 billion shekels, excluding the broader impact on productivity.
According to the Bank of Israel, the cumulative productivity gap from October 7 to the end of last year reached 177 billion shekels, largely attributed to extensive reserve recruitment and prolonged workforce absences.
