Netanyahu, Lapid Discuss Defense Budget Amid Security Establishment's Funding Gap

A high-stakes phone call took place this week involving Prime Minister Benjamin Netanyahu, opposition leader Yair Lapid, and senior security officials, convened by the Accountant General in the Ministry of Finance, Michal Abadi-Yoav.

The discussion centered on finding budgetary sources to increase Israel's defense budget, which currently stands at approximately 158 billion shekels. The security establishment claims a shortfall of 25 billion shekels is needed to meet its requirements.

Abadi-Yoav expressed opposition to exceeding the government's deficit limit of 4.9% of GDP, although she noted that tax revenues are expected to result in a lower deficit this year. She emphasized that the matter is being handled by the head of the budget division, Mehran Bar-Fezan, and Finance Minister Bezalel Smotrich, who was unable to join the call.

Unlike the budget division, the Accountant General does not rule out opening the state budget during an election period to accommodate the defense budget increase. She believes a gap of tens of billions of shekels could be bridged, largely meeting the military's demands. Abadi-Yoav also suggested earmarking funds for the IDF's 400 billion shekel multi-year rearmament plan, proposing reserved slots and urgent munitions orders via cancellable contracts for the next government.

Abadi-Yoav projected that 2027 will also be a challenging year for the defense budget, with rehabilitation costs alone reaching nearly 14 billion shekels. Coupled with high reserve duty budgets, she anticipates no significant decrease in defense spending as a percentage of GDP.