Israeli Knesset Committee Approves $4 Billion Defense Budget Transfer

The Knesset Finance Committee, chaired by MK Chanoch Milwidsky, approved on Wednesday a significant transfer of approximately 15 billion shekels (about $4 billion) to the Ministry of Defense and the Israel Defense Forces (IDF). The approval comes during an election recess and amidst ongoing disputes between the Treasury and the defense establishment.

Of the total amount, roughly 11.75 billion shekels will be moved from the general reserve to the Ministry of Defense. An additional 3 billion shekels will be reallocated from various defense expenditure items and the Ministry of Transportation. The specific uses of these funds, due to their sensitive nature, were discussed and detailed in a joint session of the Finance Committee and the Foreign Affairs and Defense Committee.

This decision follows months of warnings from defense officials. The IDF had cautioned that budget delays were harming the operational continuity of defense industries, causing the miss of critical opportunities to acquire aircraft and munitions from the United States, and could force the military to reduce reserve duty days, training, and construction projects.

The committee meeting also saw a delay concerning the allocation of at least 40 million shekels for public institutions and charities whose income was impacted by the recent conflict and are not eligible for compensation under property tax law. When it became clear the provision had not yet been implemented, Committee Chairman Milwidsky halted the proceedings. Treasury representatives assured the committee that an application system for these organizations would open immediately after the Sukkot holiday.

Additionally, the IDF representative informed the committee that the military would examine claims regarding a reduction in processing days for reservists. Other approved budget adjustments include approximately 801 million shekels for the Treasury, primarily for the Tax Authority, the Accountant General's units, and the compensation fund, with 630 million shekels earmarked for the fund's actuarial balance due to compensation frameworks for businesses affected by Operation "Iron Swords." Another 164 million shekels were allocated to the National Insurance Institute for funding unpaid leave for employees furloughed during the operation, and about 39 million shekels were designated for the Coordinator of Government Activities in the Territories (COGAT) as part of internal Ministry of Defense budget adjustments.