Litzman Refuses Budget Opening Without Cutting Coalition Funds

Opposition leader Yair Lapid has refused to open the state budget for additional defense funding unless coalition funds are cut, his office announced. Prime Minister Benjamin Netanyahu had requested Lapid's cooperation in amending the budget law to allocate more money to the defense establishment, citing the upcoming elections and the need for legislation through the consensus committee, which includes both coalition and opposition representatives.

Lapid responded to Netanyahu during a meeting, stating, "I am in favor of the proposal and support transferring the funds because the IDF needs to be strengthened. However, the budgetary source cannot be tax increases on the middle class and reservists, which is where you are leading us. Instead, include in the proposal the cancellation of corrupt coalition funds and the tens of billions of shekels you are currently transferring to finance the Haredi draft evasion, and we will support the proposal in the Knesset as well."

As previously reported, Netanyahu is advancing the opening of the state budget to add tens of billions of shekels to defense spending and to anchor a NIS 400 billion military procurement buildup plan. Bank of Israel Governor Prof. Amir Yaron, however, criticized the intention to earmark vast sums for defense at this time, warning of a "fiscal trilemma." He stressed the need for a balanced budget, reducing the debt-to-GDP ratio, and creating fiscal cushions. Yaron cautioned that funding defense needs without sidelining essential civilian expenditures would ultimately result in higher taxes or reduced civilian spending, potentially leading to future taxation, interest, and inflation.

The defense establishment has requested NIS 40 billion to cover a shortfall in its current budget of NIS 158 billion, which is nearly triple the pre-war amount. Despite this, defense officials claim the budget is insufficient for the cabinet's missions, including confronting Iran and maintaining security zones in Syria, Lebanon, and Gaza. The proposed military procurement plan, initially NIS 350 billion, has already seen NIS 40 billion urgently approved for squadrons and additional tens of billions committed by the army for future purchases. Further allocations include NIS 12.5 billion for the Foreign Ministry and NIS 7 billion for southern rehabilitation.