Netanyahu Seeks Defense Budget Hike; Lapid Suggests Funding Cuts for Ultra-Orthodox

Prime Minister Benjamin Netanyahu met with opposition leader Yair Lapid on Monday, September 14, for a security briefing. Following the meeting, Lapid's office stated that Netanyahu had requested a review of the budget law to allocate additional funds to the security system. Lapid responded by agreeing to the allocations needed to strengthen the Israel Defense Forces (IDF), but insisted that funding should not come from increased taxes on the middle class and reservists. Instead, he proposed canceling "coalition funds", tens of billions of shekels allocated to finance the ultra-Orthodox community's exemption from military service.

Netanyahu's request followed recent warnings from IDF officials about budget shortfalls. In late August, Chief of Staff Lt. Gen. Aviv Kochavi declared the "treasury is empty" and identified the Ministry of Finance as an adversary in the budget battle. The army command warned that a critical shortage of funds directly threatens operational readiness, with major arms and equipment procurement contracts expiring. A senior security source described the situation as being "on the edge of a precipice," with the Finance Ministry having "shut off the tap."

Despite instructions from political leadership to immediately allocate 15 billion shekels, these funds have not yet arrived, and the total deficit is estimated at 40 billion shekels. Although Netanyahu and Finance Minister Bezalel Smotrich had decided to increase the defense budget to a record 183 billion shekels, the government meeting to approve this was canceled, and no resolution was adopted.

Ministry of Finance officials stated that future defense spending would necessitate cuts to civilian budgets and tax increases, decisions to be made by the government formed after the October 27 Knesset elections. They also countered IDF criticism by claiming all agreements were met and funds were allocated beyond Knesset-approved sums, urging security leaders to use funds more responsibly. The IDF disputes this, citing damage to its multi-front combat capabilities, including difficulties repairing tanks and a shortage of Hummer vehicles, many of which are damaged and awaiting replacement. The article also notes that the U.S. manufacturer will cease production of the relevant Hummer model, and domestic defense industries like RAFAEL and Elbit cannot be expected to finance the IDF's armament needs.

The financial crisis is also impacting the IDF's strategic air superiority, exemplified by the cancellation of a deal to purchase Apache combat helicopters from the U.S.