A spending plan approved by Israel’s Parliament has provided Prime Minister Benjamin Netanyahu with a significant political victory, allocating a substantial portion to military spending and indicating that Israel anticipates maintaining a war footing for the foreseeable future.
The $206 billion budget was approved on Tuesday with a vote of 66 to 52, offering Mr. Netanyahu a boost in power following over a year of public dissent concerning Israeli hostages, political opposition, and legal challenges.
The passage of the budget carries important political and financial ramifications. Had it not been approved by the end of the month, Parliament would have been automatically disbanded, potentially triggering elections 18 months earlier than scheduled, which recent polls suggested Mr. Netanyahu’s coalition of right-wing parties might lose.
With the budget in place, Mr. Netanyahu has increased flexibility to determine his government’s priorities both domestically and in Gaza, making it more difficult for any dissenting party within his coalition to threaten its stability.
Michael Koplow, an analyst at the Israel Policy Forum, noted that this could lead to an escalation of extreme right-wing populism and continued military engagement in Gaza, or it could facilitate an attempt at a diplomatic resolution and a Saudi normalization deal. The chosen path will largely reflect Mr. Netanyahu’s strategic decisions rather than pressures from coalition partners.
The vote prompted significant protests, with demonstrators blocking roads to Parliament and urging Mr. Netanyahu to expedite negotiations for the release of several dozen hostages held in the Gaza Strip for nearly 18 months. Ongoing talks for a cease-fire with Hamas appear to be stalled, and the government’s recent decision to return to military action has raised concerns for the safety of unreturned hostages.
Yair Lapid, leader of Israel’s parliamentary opposition, criticized the budget for including cuts to essential services such as health care, welfare, and education while reallocating funds to right-wing coalition partners. He stated, “The budget harms every Israeli citizen, especially working people. Just to keep the coalition going for a few more months, it sells out the citizens of Israel.”
The budget caps spending at $168.8 billion and allocates $29.9 billion to the defense ministry, the highest allocation for any government agency. Nearly 18 percent of the newly approved budget for 2025 will be directed towards military and defense operations.
A summary of the budget indicated that this allocation reflects an ongoing requirement for substantial military spending since October 2023, following a Hamas-led assault that resulted in approximately 1,200 Israeli fatalities and initiated the ongoing conflict in Gaza. Increased spending last year was also attributed to new military fronts in Lebanon and Syria and heightened airstrikes against Iran and Yemen.
Finance Minister Bezalel Smotrich, an ally of Mr. Netanyahu, characterized the budget as a "war budget" with hopes that it would also serve as a "victory budget" following its approval.
The United States, involved in stalled peace negotiations aimed at freeing Israeli hostages and concluding the conflict in Gaza, has alleviated some of Israel’s wartime expenses by providing billions of dollars in military aid.
In the current year, the Trump administration has authorized the sale of more than $12 billion in arms to Israel over the next decade, including $2 billion in munitions that human rights organizations have claimed have caused indiscriminate civilian casualties in Gaza.