Netanyahu Demands Opening 2026 Budget to Secure Long-Term Defense Funding Ahead of Elections

Prime Minister Benjamin Netanyahu instructed last Thursday to "open" Israel's 2026 state budget and legally anchor defense budgets for the next 13 years. This unprecedented move requires passing a new 2026 budget law despite the current August budget already being executed, with elections scheduled in 81 days and the Knesset in recess. Treasury officials describe the situation as unprecedented due to the scale, timing near elections, and the absence of parliamentary sessions. They also note that the immediate urgent needs of the Israel Defense Forces (IDF) have been met, questioning the urgency of locking in funding for over a decade.

The push comes from the defense establishment and Netanyahu, who argue urgency, but Treasury officials counter that all urgent requests during the war have been addressed and that there is no real urgency for a 13-year commitment. Treasury views the move as an attempt to lock in commitments before a new government can alter them. There is uncertainty among officials whether Netanyahu's directive is binding or a preferred stance. The decision involves hundreds of billions of shekels without thorough planning, multi-year analysis, or cost assessment, prompting Treasury to call it "crossing a black line."

Since the 2026 budget approval, defense demands have repeatedly increased, from an initial 2 billion shekels to 46 billion shekels added within eight months, raising the defense budget from 62 billion shekels pre-war to 158 billion shekels currently. An additional 25 billion shekels were allocated outside this count, potentially bringing the total to 183 billion shekels, nearly triple the pre-war amount. Netanyahu now demands increasing the multi-year defense plan from 350 billion to 400 billion shekels.

The Treasury highlights that no updated plans exist for the 100 billion shekels expected from efficiency gains and internal revenues, and the base defense budget remains undefined. This lack of clarity prevents calculating the impact on the deficit and national debt or forming the legally required fiscal framework for future government commitments. Treasury officials argue the fluctuating figures prove no urgent need exists. The political timing also complicates the legal process, as budget changes require legislation and Knesset sessions, raising questions about the legality of opening the budget so close to elections without parliamentary approval.

The defense and Treasury ministries blame each other for the stalemate, with the defense accusing Treasury of using the election period to freeze budgets, while Treasury claims the current pressure exploits political timing to force immediate decisions. Although the next government can reverse Netanyahu's decision, doing so would incur financial penalties and political costs, as it would signal a reduction in Israel's post-October 7 defense preparedness. Legal experts say opening the budget now is possible but would require strong justification and parliamentary procedures, which seem unlikely to be met.