Israeli Finance Committee Approves $4 Billion for War Expenses

The Knesset's Finance Committee on Wednesday approved a budget transfer of approximately 15 billion shekels (about $4 billion USD) to cover military and civilian war-related expenses, with the majority allocated to the Ministry of Defense. The committee's meeting was convened after the Knesset's dissolution, requiring approval from the Consensus Committee, which includes representatives from both the coalition and opposition.

This transfer is internal to the existing state budget and does not increase the overall national budget. Of the total amount, 11.75 billion shekels were moved from the general reserve fund, which was earmarked for budget overruns, such as those experienced in the defense budget. An additional 3 billion shekels were reallocated from transportation and miscellaneous defense expenditure sections to the Ministry of Defense.

The committee also addressed compensation and employee support. The Tax Authority's compensation fund received 801 million shekels to cover property damage and lost income from recent years, including during conflicts like "Operation Iron Swords" and "Operation "The Sword of David." For 2025, all purchase tax revenue was allocated to this fund, reverting to 25% in 2026. This funding aims to address the actuarial deficit in the fund, particularly for compensation related to "Operation "The Sword of David."

Furthermore, 164 million shekels were allocated from the general reserve to the National Insurance Institute for employees placed on unpaid leave during "Operation "The Sword of David." An additional 39 million shekels were designated for the coordinator of government activities in the territories. Representatives from the non-profit sector raised concerns that a decision to allocate at least 40 million shekels to support public institutions affected by the conflict had not yet been implemented for 2026. The committee chairman, Hanoch Milvitzky, halted discussions on this matter, with the Treasury announcing that a system for eligible non-profits to submit claims would open after the Sukkot holiday.