Finance and Defense ministries reach deal to give IDF an extra NIS 15 billion

Deal mediated by National Security Council prevents potential tax hikes and spending cuts incurred by reopening of 2026 state budget, which already included record defense spending

The Finance Ministry said Thursday it had reached an agreement with the Defense Ministry to immediately transfer an additional NIS 15 billion ($5.01 billion) in budget funds for the military amid reported claims by the IDF that it was on the verge of grounding an array of units.

The ministries also agreed on a joint mechanism to monitor expenditures requested by the defense establishment.

The Defense Ministry had in recent weeks demanded NIS 40 billion ($13.36 billion) in additional funds amid a shortfall due to wartime spending.

The compromise, which was mediated by the National Security Council, precludes a reopening of the 2026 state budget, which would have entailed new taxes or cuts to public services, the Finance Ministry said.

Military costs have surged as Israel waged costly wars in Gaza, Lebanon and Iran since the Hamas-led onslaught of October 7, 2023, with the military also seeking to significantly expand its forces that were found lacking in preventing the Hamas massacre and subsequent wars.

The state budget that was passed in March, amid the Iran war that began on February 28, already allotted the Defense Ministry a record NIS 143 billion ($45.8 billion), or about about 17% of the total spending bill.

The budget also gave the Defense Ministry an extra NIS 22 billion ($7.5 billion) in income-dependent expenditure (including American aid grants) and NIS 82.2 billion ($26.3 billion) in authorization to commit for future spending.

The government had earlier in March approved a 3 percent across-the-board cut to all ministries except the Defense Ministry to help fund an additional NIS 28 billion ($9 billion) for the IDF, which was firing hundreds of multi-million shekel interceptors to counter Iran’s missile attacks.

Nonetheless, military sources cited by Channel 12 on Wednesday claimed that absent an imminent boost, the IDF would have to put off calling up reservists, building bases in Gaza and Lebanon, producing artillery shells and purchasing necessary spare parts for tanks and other equipment.

In response, Finance Ministry sources pointed to the “imaginary” defense budget and said the items on the military’s chopping block indicated a “serious management problem” in the IDF, the network reported.

Times of Israel staff contributed to this report.