Israeli Finance Committee Approves 1.1 Billion Shekel Transfer for Southern Communities Reconstruction

The Israeli Finance Committee has approved the transfer of 1.1 billion shekels for the rehabilitation of southern communities affected by the October 7 attacks, ending a week-long budgetary dispute. The conflict arose after Finance Committee Chairman Hanoch Milwitsky demanded detailed budget utilization reports from the Momentum and Revival Administration to identify unused funds that could be redirected to support northern businesses suffering from prolonged conflict-related economic hardship.

Milwitsky sought to reallocate approximately 500 million shekels to northern businesses, especially in the tourism sector, which has struggled to recover after nearly three years of ongoing conflict. The committee criticized the administration for providing partial reports that omitted key data on budget utilization rates, hindering transparency and oversight. Despite repeated requests, the administration delayed delivering full reports, prompting Milwitsky to withhold the southern reconstruction funds temporarily.

The Momentum and Revival Administration explained that the government’s decision to allocate 5.6 billion shekels was only finalized on June 6, with funds transferred last Wednesday, making it impossible to present execution data for 2026 budgets. Shir Rabinovitch, Deputy Director of the Prime Minister’s Office, confirmed recent meetings with the administration and said further discussions are scheduled.

Milwitsky emphasized the ongoing economic distress in northern Israel, noting that despite the Property Tax Fund’s compensation for war damages, many northern businesses dependent on tourism remain unrecovered. He criticized the administration’s lack of cooperation and transparency, stating that the withheld budget transfer was intended to prompt dialogue and solutions for northern businesses. The committee unanimously approved the southern funds transfer while agreeing to continue monitoring efforts to assist northern businesses.

This resolution concludes the immediate budget impasse but highlights ongoing challenges in balancing reconstruction needs across regions affected by conflict in Israel.