By Micah Jonah
January 29, 2026
Israel’s parliament is set to hold an initial vote on the 2026 state budget, testing Prime Minister Benjamin Netanyahu’s embattled coalition as elections loom. The government faces deep divisions over military conscription and other issues, with ultra-Orthodox parties threatening to withhold support unless their demands for exemptions for seminary students are met.
Netanyahu stressed the importance of passing the budget to avoid early elections, warning that holding polls now would be a mistake. The budget proposes total state spending of 662 billion shekels ($214 billion), with a deficit ceiling of 3.9% of GDP still considered high by the Bank of Israel.
Finance Minister, Bezalel Smotrich urged Haredi parties not to link the draft law to the budget vote, noting additional spending benefits for their constituencies. Despite the fragile coalition, preliminary approval is expected, though two more votes are required before the end of March for full enactment.
The vote comes amid lingering tensions from recent conflicts in Gaza and Lebanon, highlighting the challenges of balancing security needs, fiscal responsibility, and political alliances.
