Treasury and Defense Ministry Clash Over Billions in Security Budget

A fierce dispute between Israel's Treasury and Defense ministries has halted the transfer of additional funds to the security establishment, with the Treasury claiming no immediate need for more money before elections. Officials stated that NIS 15 billion already approved by the government, with Treasury consent, has been "stuck" for 45 days in the Knesset Finance Committee, which has not convened to approve it. The Treasury asserts that the defense system has sufficient funds for urgent operations, citing that multi-year budgeting for items like Apache helicopter procurement is not being delayed.

However, the Defense Ministry contends that a crucial deal for 12 Apache helicopters was missed due to the delayed funding. The current defense budget stands at NIS 143 billion, with a proposed increase to NIS 158 billion approved by the government but awaiting Knesset ratification. The original 2026 defense budget was projected at NIS 111 billion, but Prime Minister Benjamin Netanyahu had previously decided to raise it to NIS 143 billion. The Defense Ministry is now demanding a significant increase to NIS 183 billion, a request Netanyahu has yet to rule on.

Netanyahu's recent meeting with opposition leader Yair Lapid reportedly collapsed over the budget issue, as Lapid demanded that any additional funding come from coalition budgets, which have largely already been allocated to Haredi institutions and the Ministry of Settlement. Treasury officials criticized the Defense Ministry's budget management as "failed and illegal" and lacking transparency, accusing them of consistently seeking more state funds at the expense of education, health, and welfare. They warned that the defense system's demands could jeopardize Israel's future economic capacity to support large-scale military operations.

Despite the conflict, senior Treasury officials indicated they would comply with any directive from the Prime Minister to alter the state budget, even if it impacts public funds. They emphasized that the Treasury has been supporting the war effort, nearly tripling the defense budget, and that without this support, Israel would not have achieved its operational successes. The Treasury also pointed to alleged inefficiencies in the reserve duty system, despite significant funding injections, which they claim ultimately burden reservists and their families.