Netanyahu Unilaterally Approves 40 Billion Shekel Boost to Defense Budget Amid Treasury Dispute

Prime Minister Benjamin Netanyahu has decided to increase the 2026 defense budget by 40 billion shekels, bypassing unresolved disagreements between the Defense Ministry and the Treasury. The National Security Council (NSC) announced the budget summary today, detailing that the additional funds will be disbursed in three installments by the end of the year, raising the total defense budget to approximately 183 billion shekels, about 70 billion shekels above the original government agreement.

According to the NSC, 15 billion shekels will be allocated immediately, with two further installments of around 25 billion shekels each scheduled for October and November, based on military needs. This decision follows warnings from the defense establishment that without the budget increase, operational capabilities would be compromised. The defense forces have reportedly faced halted production lines for ammunition and spare parts, suspension of construction for military outposts in sensitive areas such as the Gaza Strip and southern Lebanon, and the risk of releasing reservists prematurely.

The Treasury has criticized the defense sector for overspending beyond the approved 143 billion shekel budget, accusing it of poor management and resisting budgetary oversight. The Treasury also expressed concern that despite the large budget, cuts are being made in critical areas like tank maintenance and outpost construction, which they say undermines effective defense and burdens Israeli citizens with higher taxes and cuts in social services.

Netanyahu’s decision also enables the immediate commencement of contracts worth 131 billion shekels, facilitating the procurement of ammunition, weapons, and the activation of production lines. The government aims to finance the budget increase through revenue growth without opening a new budget in 2026. Defense officials have stressed the urgency, warning that operational impacts could begin within weeks if the budget gap is not closed.