Netanyahu announced defense budget increase, but government discussion cancelled

The government will not discuss the breaching of the state budget and the increase in defense spending this Wednesday, ahead of the elections. At this point, it is unclear whether Prime Minister Benjamin Netanyahu's initiative will be postponed or canceled entirely.

Just a few days ago, the Prime Minister claimed that the defense budget must be urgently increased by tens of billions of shekels.

"It is urgent to take care of the IDF's armament needs and the completion of urgent military procurement that cannot be delayed," he stated in conversations with government members and the Minister of Finance, Bezalel Smotrich, who agreed with him.

However, it became clear today that despite the agreement between the Prime Minister and Minister of Finance Bezalel Smotrich to immediately increase the defense budget by at least 25 billion shekels to approximately 183 billion shekels, the government discussion was canceled. Furthermore, a formal decision document was not even presented in advance, as required for government proceedings.

The original defense budget for 2026 was set at 111 billion shekels. In March, the Prime Minister ordered an increase of 32 billion shekels following security establishment demands, and in recent weeks, it was increased by another 15 billion to 158 billion shekels. The recent agreement between Netanyahu and Smotrich aimed to provide a further 25 billion shekels, completing a total additional increase of 40 billion shekels.

Increasing the defense budget to 183 billion shekels would bring it close to the all-time high of 186 billion shekels reached last year. Since the current proposal involved breaching the budget, no further cuts to government ministries or new taxes were expected at this stage. However, the Ministry of Finance has already clarified that in the 2027 fiscal year, it will be necessary to raise taxes and implement painful state budget cuts, which the next government will have to decide upon.