As Israel’s Cabinet approved the 2026 state budget on Friday, Israeli Prime Minister Benjamin Netanyahu said his government is united behind the spending plan and intends to serve out its full term.
The budget will total approximately 662 billion shekels (about $205 billion), with a deficit ceiling for 2026 of 3.9% of GDP. The draft state budget must still pass three readings in the Knesset.
“It’s good that we are going to vote on the budget and finish it before the Sabbath,” Netanyahu said at the start of a special Cabinet session on the budget. “I see the objective and positive approach of the ministers and of you, Minister of Finance [Bezalel Smotrich], and we are on our way to bringing a budget—a budget that is good news for the State of Israel. This government, for all those who are concerned about the matter, will complete its term.”
After the vote, Netanyahu said, “I estimate that around this table, in this room, I’ve passed at least 23 budgets—I don’t know the exact count—as prime minister or as finance minister. But I can hardly remember passing a budget in such harmony.”
He added, “This is a testament to the spirit of enlisting oneself, of ‘getting under the stretcher'; the desire to continue with the burdens and missions of this government, which, as I said, will live out its days.”
The vote came a day after Netanyahu submitted the budget for government approval. He told ministers the spending plan is “responsible and balanced” and “above all meets all Israel’s security needs,” adding that the government plans to lower taxes, reduce regulation and invest in northern and southern communities battered by the war.
Shortly after Friday’s Cabinet meeting opened, the Defense Ministry announced that Defense Minister Israel Katz and Smotrich had finalized the defense budget framework for 2026, which will total 112 billion shekels (about $35 billion).
According to the ministry, the agreement is based on an operational assumption of an average of 40,000 IDF reservists serving throughout 2026, reflecting Katz’s directive to ease the burden on reserve soldiers amid an ongoing multi-front security reality.
In addition, the ministries agreed on a 725-million-shekel ($225 million) package spread over three years to strengthen security infrastructure in Judea and Samaria. The funds will support armored transport, new roads and bypass routes, the establishment of IDF bases in the area and projects along Israel’s eastern frontier.
“We will continue to act decisively to strengthen the IDF, to fully meet the needs of the fighters and to reduce the burden on the reservists—in order to ensure the security of the State of Israel,” Katz said.
The 2026 budget vote came as Israel works to stabilize its economy following prolonged conflict since the Hamas attacks on Oct. 7, 2023. On Thursday, Smotrich said the plan contains “major benefits for the Israeli people” and includes reforms intended to lower prices and boost growth.
Failure to pass the state budget in the Knesset by a March 31, 2026, deadline would automatically trigger snap elections within 90 days, an outcome Netanyahu rejected as he insisted his coalition would complete its term. In any case, a national election must be held by Oct. 27, 2026.
