Netanyahu Highlights Cost of Living Ahead of October Elections Amid Coalition Maneuvers
Prime Minister Benjamin Netanyahu and Defense Minister Israel Katz visited southern Lebanon on June 30, 2026, as part of ongoing security concerns. In a recent appearance on the Patriotim studio, Netanyahu acknowledged the high cost of living as a pressing issue requiring attention, responding affirmatively to interviewer Yinon Magal's question. Both the Yachdav party of the Bennett-Lapid brothers and Yisrael of Einzekut have recently emphasized the economic hardships faced by citizens and pledged to address them.
With Israel's elections scheduled for October 27, Netanyahu called for the formation of a "broad national government without boycotts," a statement interpreted as an attempt to maintain coalition unity, including ultra-Orthodox parties and right-wing figures such as Ben Gvir and Smotrich. Critics argue that Netanyahu’s definition of "national" excludes these groups and that his approach is more about preserving his political base than genuine unity. Netanyahu has also resisted joining Yair Lapid’s post-October 7 initiative to form a broad government excluding extremists.
Regarding cost-of-living measures, Netanyahu’s government has focused on subsidies primarily benefiting the ultra-Orthodox community, including mortgage subsidies amid rising interest rates, a 1% VAT reduction, and funding for daycare centers even when spouses do not work. Additional spending includes maintaining 33 government offices with minimal impact and a new "jobs law" that reverses kosher reform and creates hundreds of government jobs costing 730 million shekels annually. Some funds allocated for regional development, such as 360 million shekels for Eilat and the Ayelot region, largely consist of previously approved but unused money.
Netanyahu’s government plans to increase the defense budget by 40 billion shekels to 180 billion, reflecting a continuous state of conflict with threats from Gaza, Iran, Lebanon, and Syria. The finance ministry claims reserves exist but has not updated the Knesset, and some election-related spending may increase the deficit, potentially harming Israel’s credit rating. Critics warn that election-driven economic initiatives lack genuine solutions and call for clear legal guidelines to prevent election-related financial maneuvers.
Despite the political rhetoric, Netanyahu’s coalition management appears focused on retaining a narrow, sectarian base rather than addressing broader national economic challenges. The upcoming elections are seen as critical, with ongoing delays in dissolving the Knesset causing direct fiscal harm. Legal advisors are urged to intervene to curb election-driven economic policies that strain public finances without delivering substantive relief.
