Netanyahu Seeks to Reopen 2026 Budget for Massive Defense Spending Increase Ahead of Elections

With 81 days remaining until Israel's national elections, Prime Minister Benjamin Netanyahu plans an unprecedented move to reopen the 2026 state budget. This would allow for tens of billions of shekels in additional defense funding beyond the already significantly increased allocations approved in December. The current defense budget has already tripled since before the October 7 war, rising from 62 billion shekels to nearly 183 billion shekels this year through various increments and supplementary funding. Netanyahu aims not only to boost this year's defense budget further but also to lock in hundreds of billions of shekels in defense spending commitments for the coming decade, potentially reaching around 400 billion shekels, up from a previously agreed 350 billion shekels.

Reopening the 2026 budget, which is already eight months into execution and was approved before the Knesset went into recess, requires legislative action and reconvening parliament. This move would constrain the incoming government by committing it to long-term financial obligations decided by the outgoing administration. Officials in the Finance Ministry express concern over the lack of clarity on how tens of billions of shekels will be financed, as no updated plan exists to cover the proposed 50 billion shekels from efficiency savings and another 50 billion from internal revenues. Without new revenues or cuts elsewhere, the increased defense spending could lead to higher deficits, tax hikes, or cuts in social sectors such as education, health, and infrastructure.

The timing is controversial, as the government is making major budgetary decisions just weeks before elections, limiting the next administration's flexibility. The Finance Ministry notes that defense spending requests have escalated rapidly, from an initial 2 billion shekels increase to demands now exceeding 20 billion shekels. While there is broad agreement on the need to strengthen the military after the October 7 conflict, the scale and timing of these financial commitments raise political and fiscal challenges. Netanyahu's government must justify the urgency of reopening the budget now rather than leaving these decisions to the next government, especially since emergency defense funding has been found during the war without reopening the entire budget. The move could significantly impact Israel's fiscal outlook and social spending priorities for years to come.