The Ministry of Finance is utilizing reserves and exhausting every last possibility, before reopening the budget to finance the military campaign against Iran. Today, the ministry laid before the Knesset Finance Committee a request to transfer to the Ministry of Defense NIS 3 billion that were in the budget to cover unexpected defense expenditure. In a further request, the Ministry of Finance asked for a NIS 700 million addition to the defense budget, to be financed by cuts to the budgets of other ministries.
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The larger sum, NIS 3 billion, is intended for IDF expenditure on manpower, which grew dramatically even before the operation in Iran. It became clear last month that this reserve would have to be used, when the government approved the record drafting of 450,000 reservists to cover the expansion of the fighting in the Gaza Strip. The government originally allocated NIS 10 billion to this reserve, but most of it was used long ago to fill holes in the budget.
As for the additional NIS 700 million, its purpose has been classified at the Ministry of Finance’s request, and it will be transferred to the “Security Expenses” item. Each government ministry will contribute to this item in proportion to its share of the total budget.
It is already clear that adding NIS 3.7 billion to the defense budget will not meet the demands. Unofficial sources put the cost of the operation in Iran at about NIS 1 billion per day, and even before it started the defense establishment’s spending had exceeded the budget by some NIS 20 billion.
The Ministry of Finance is gearing up to reopen the budget and raise the spending limit, but that is a long legislative process that will be similar to approving the budget again from the start, including an all-night government session to deal with coalition party pressures, three readings in the Knesset, and broad challenges in the Knesset Finance Committee. Until that process matures, the budget transfers are meant to provide some breathing room in financing the military campaign.
Published by Globes, Israel business news – en.globes.co.il – on June 19, 2025.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.
