More than two months late and amid uncertainty about its fate, the 2026 state budget was laid before the Knesset yesterday evening. The Knesset is due to vote on the budget at first hearing within the next few days.
The government has hesitated to submit the new budget to the Knesset until now for fear that it will not be able to muster a majority for it, not because of disputes over the budget itself but because of the crisis over the conscription bill, which has led the haredi parties to threaten that they will oppose the budget in the Knesset plenum.
RELATED ARTICLES
Smotrich threatens to double bank tax
Budget imposes surtax on gains from investment homes
Cabinet passes 2026 state budget but Knesset vote uncertain
Treasury chief slams defense budget management
The state budget documents were filed 80 days after the date set by law. There are no sanctions for this delay, but the mandatory deadline for passing the budget is approaching. Under the law, unless the complicated process of passing the budget through the Knesset committees and three readings in the plenum is completed by March 31, the Knesset is dissolved and elections are held.
Despite the tight timetable, the budget was submitted to the Knesset six weeks after it was approved by the government. The budget framework approved by the government is NIS 662 billion, which compares with NIS 650 billion for the 2025 budget. The defense item in the budget is NIS 112 billion, and the Ministry of Finance fears that the IDF will not stay within it.
After first reading, the reforms accompanying the budget will be channeled to the various Knesset committees, chiefly the Finance Committee and the Economic Affairs Committee. Battles are expected in the committees over structural changes such as the proposed reform of the dairy industry, the special tax on the profits of the banks, and the imposition of a property tax on vacant land.
Published by Globes, Israel business news – en.globes.co.il – on January 19, 2026.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2026.
