The Knesset is set to hold a critical vote regarding the first reading of Israel's 2026 state budget, a significant event that unfolds amidst tensions with haredi parties, who have issued warnings about their support.
This budget, if it fails to secure approval in all three readings by the end of March—when the current fiscal year concludes—would lead to an automatic dissolution of the Knesset and trigger new elections.
On January 25, 2026, the proposed budget, which amounts to a staggering NIS 662 billion, excluding debt servicing costs, will be presented for its initial reading. The government has established a deficit ceiling of 3.9% of the country’s gross domestic product, reflecting its financial strategy. Notably, defense expenditures have been significantly increased from NIS 90 billion to an impressive NIS 112 billion (approximately $35.45 billion).
Before the official vote occurs, discussions are expected to commence in the plenum on Monday evening. This budgetary debate takes place against the backdrop of a political impasse between the government and ultra-Orthodox parties regarding a contentious draft bill related to haredi conscription. Critics assert that the current proposal for this bill does not effectively enforce mandatory military service for haredi individuals and primarily serves as a political maneuver to placate the haredi parties. The Israel Defense Forces (IDF) has continually expressed an urgent need for increased troop numbers.
Since July, Prime Minister Benjamin Netanyahu has struggled to maintain a stable coalition majority, a situation exacerbated by the breakdown of negotiations over haredi conscription laws, resulting in the withdrawal of haredi parties, Shas and United Torah Judaism (UTJ), from the coalition. These parties have made it clear that their support for the state budget is contingent upon reaching agreements concerning the draft law. They have even threatened to oppose the budget altogether if the conscription bill isn't passed beforehand.
Reports suggest that the government has managed to secure the haredi parties' backing for the budget's first reading, promising that discussions around the draft legislation will progress shortly thereafter. Coalition insiders reportedly believe that with Shas and UTJ's support, the budget will likely pass.
Opposition leader Yair Lapid, representing the Yesh Atid party, did not hold back during a recent press conference, criticizing the government's budget as one crafted by "the corrupt and the shirkers." He described it as wasteful and negligent, alleging that it perpetuates hardship for working citizens who contribute through taxes, serve in the reserves, and sustain the nation. Lapid particularly objected to the financial allocations directed toward haredi parties as part of the budget framework.
A discussion on advancing the haredi draft bill was postponed from last Thursday, directly preceding the budget vote, with plans for further talks scheduled for Tuesday. The legal advisor for the Knesset Foreign Affairs and Defense Committee has pointed out that certain aspects of the haredi draft bill necessitate revisions.
Despite the ongoing political turmoil, some members of the Knesset, like Yesh Atid MK Vladimir Beliak, express optimism that the budget will successfully pass its first reading. He emphasized the urgency of advancing the draft exemption law alongside the budget discussions, highlighting that without resolution on the draft law, the budget cannot progress. Beliak also remarked that the opposition is expected to stand united against the budget in the plenum.
This upcoming vote is not just a procedural step—it’s a battleground for differing views on national priorities and governance. What do you think? Is this budget the right move for Israel, or is it merely an attempt to placate specific interest groups? Share your thoughts!
