Israel’s parliament, the Knesset, approved the 2026 state budget late Sunday night, just ahead of a critical deadline, following a prolonged and contentious session. The budget passed by a vote of 62 to 55. The accompanying Economic Arrangements Law was approved by the same margin, while an amendment to the Income Tax Ordinance passed 61-52.
Lawmakers are set to reconvene later for a legislative marathon ahead of the Passover recess, with key items on the agenda including a proposed death penalty law for terrorists and an extension of the National Civilian Service Law, which could provide an alternative to military service for ultra-Orthodox men.
Coalition maneuver triggers dispute
Tensions flared during the vote after the coalition introduced last-minute budget reservations that resulted in the approval of additional funding for ultra-Orthodox institutions.
According to lawmakers, some opposition members mistakenly supported the measures, believing they were amendments of their own. The provisions ultimately directed funds to Torah institutions and related projects, reportedly bypassing standard Finance Ministry procedures.
Preliminary estimates suggest the additional allocations could amount to roughly 800 million shekels, though the exact figure remains unclear.
Opposition denounces move as ‘unprecedented’
Opposition leaders reacted angrily, accusing the government of exploiting parliamentary procedures.
“There has been nothing like this in the history of the Knesset,” said Yair Lapid, leader of the Yesh Atid party, who described the move as a betrayal of public trust.
Former Prime Minister Naftali Bennett also criticized the timing of the vote, saying the maneuver was carried out late at night to avoid scrutiny.
Other opposition lawmakers said the allocations could be difficult to reverse, potentially requiring legal challenges.
Coalition defends process
Coalition members dismissed the criticism, arguing that the opposition failed to properly review the measures before voting.
Minister Ze'ev Elkin said the episode reflected negligence by opposition lawmakers, noting that a large majority of Knesset members ultimately supported the funding increase.
Officials within the coalition expressed satisfaction with the outcome, despite internal tensions over other legislative priorities.
Defense spending rises sharply amid war costs
Earlier in the session, lawmakers approved the 2026 Budget Framework Law, setting a deficit target of 4.9% of GDP.
Government spending was increased by 32 billion shekels, largely due to the costs of the ongoing conflict with Iran. The budget includes a 7 billion shekel defense reserve and a 5.8 billion shekel civilian reserve for war-related expenditures.
Total budget spending is expected to reach 699 billion shekels, with defense accounting for the largest share at 142 billion. The education and health ministries follow with allocations of 97 billion and 63 billion shekels, respectively.
Political uncertainty persists despite budget passage
Despite securing passage of the budget, tensions remain within the coalition. National Security Minister Itamar Ben-Gvir had warned he might withhold support unless a separate bill introducing the death penalty for terrorists advances.
Prime Minister Benjamin Netanyahu met with Ben-Gvir ahead of the vote and pledged to attend the upcoming session on the issue.
The budget approval marks a key political milestone, but analysts say underlying disputes and procedural controversies highlight ongoing instability within Israel’s political system.
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