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 a prolonged state of war.
The $206 billion budget was approved on Tuesday with a vote of 66 to 52, reinforcing Mr. Netanyahu’s position following over a year of public dissent regarding Israeli hostages, intense political opposition, and legal challenges.
The budget's passage 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 approximately 18 months early, which recent polls suggested Mr. Netanyahu’s coalition might lose.
With the budget's approval, Mr. Netanyahu gains increased flexibility to determine his government’s priorities, both domestically and in Gaza, as it becomes more challenging for any single discontented party within his coalition to threaten its stability.
Analyst Michael Koplow noted that this could lead to either a continuation of extreme right-wing populism and military action in Gaza or an effort to establish an exit strategy and pursue normalization with Saudi Arabia. He emphasized that the direction taken will reflect Mr. Netanyahu’s own 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 hostages held in Gaza for nearly 18 months. Efforts to renew a cease-fire with Hamas appear stalled, raising concerns among Israelis for the safety of the unreturned hostages.
Yair Lapid, leader of the parliamentary opposition, criticized the budget for including cuts to essential services such as health care, welfare, and education, while reallocating funds to Mr. Netanyahu’s right-wing coalition partners. He stated, “The budget harms every Israeli citizen, especially working people,” and accused the government of compromising citizens' welfare to maintain coalition stability.
The budget caps spending at $168.8 billion, with $29.9 billion designated for Israel’s defense ministry, the largest allocation to any government agency. Nearly 18 percent of the newly approved budget for 2025 is earmarked for military and defense operations.
A summary of the budget indicated that this allocation reflects the ongoing necessity for substantial military spending since October 2023, following a Hamas-led assault that resulted in the deaths of approximately 1,200 Israelis and initiated the current conflict in Gaza. The budget also noted increased spending last year as Israel engaged in new military operations in Lebanon and Syria, as well as intensified airstrikes against Iran and Yemen.
Finance Minister Bezalel Smotrich, an ally of Mr. Netanyahu, described the budget as a “war budget” and expressed hope that it would also serve as a “victory budget” following its approval.
The United States, involved in stalled peace negotiations aimed at securing the release of Israeli hostages and concluding the war in Gaza, has alleviated some of Israel’s wartime expenses by providing billions of dollars in military aid.
This year, the Trump administration has circumvented Congress to authorize over $12 billion in arms sales to Israel over the next decade, including $2 billion in munitions that human rights advocates claim have indiscriminately harmed civilians in Gaza.