Knesset Approves 2026 Budget in First Reading

SadaNews - The Knesset's plenum has approved the state budget bill for 2026 in the first reading, in a move aimed at temporarily maintaining the cohesion of the government coalition, despite ongoing disputes over the law exempting Haredim from military service.

The approval came with a majority of 62 votes in favor and 55 opposed, following internal pressures within the coalition to overcome the budget crisis, amidst legal warnings about the possibility of the Knesset dissolving automatically if the budget is not approved by the specified deadlines.

The law will now proceed to the finance committee led by the Haredim, headed by the "Degel Hatorah" faction leader, MK Moshe Gafni, for final amendments before being presented for a vote in the second and third readings.

The approval occurred after Haredi parties backed away from their initial opposition to the vote, which had previously led to the session being postponed earlier this week due to disputes over the Haredim's military service exemption law.

The Knesset stated in a report that the total spending budget for 2026 will amount to approximately 811.74 billion shekels, consisting of a regular budget of about 580.75 billion shekels, in addition to a budget of around 230.99 billion shekels.

The explanation for the budget bill indicates that "the government is obligated, based on the principles set out in the Basic Law: The Economy of the State and the Law on Budget Principles to present a budget bill to the Knesset for approval for each financial year."

The explanation adds that "the budget law sets a ceiling on the maximum amounts authorized for the government to spend during a specific financial year, whether as direct expenses or as expenses contingent on revenues, and it also establishes the ceiling for financial commitments that the government may undertake even beyond the financial year itself, in addition to the maximum number of employment positions it is allowed to occupy."

The report noted that "the state budget reflects the prioritization planned by the government and addresses the needs it sees as existing at the time of budget preparation," pointing out that "the budget is formulated with the understanding that the state's needs are variable and to not hinder the government's ability to continue making decisions and formulating policies throughout the year, even if it may have an impact on the budget."

Members of the Knesset from the "Degel Hatorah" and "Shas" parties voted in favor of the budget project, while members from "Agudat Yisrael" (a component of Yahadut Hatorah), including Yitzhak Goldknopf, Yaakov Tessler, and Meir Porush, opposed it.

At the same time, the "Degel Hatorah" party emphasized that its support for the budget was limited to the first reading only, denying any prior commitment to vote in favor in the second and third readings until agreements are reached regarding the conscription law.

The party stated in a report that Finance Minister Bezalel Smotrich's remarks about a comprehensive Haredi commitment to support the budget at all stages were completely inaccurate and that "everyone knows that."

Smotrich had claimed earlier today that the government "would not have brought the budget for the first reading without a Haredi commitment to support it in all three readings," asserting that the Haredim "do not link the budget to the exemption law from conscription."

He added in his speech before the vote that "after two years of elevated and justifiable security budgets, we are starting to reduce it and increase investments in education, welfare, and artificial intelligence."

The Finance Minister insisted that "the economy is growing, and the stock market is rising," and that the government "has begun to reduce housing prices and will continue in this direction," which sparked protests from the opposition benches, where members interrupted him with chants, including: "When was the last time you went to the supermarket?".

In contrast, the head of the "Yahadut Hatorah" party, Yitzhak Goldknopf, announced that he would vote against the budget despite the required majority being present, stating from the Knesset podium that he "votes in protest" against the budget proposal for 2026.

Goldknopf added: "I am here today as an envoy for thousands of young people and students of religious institutes, whose study of Torah has become a pretext for threatening them with arrest and imprisonment, and they have become under the law a target for personal penalties."

Before the vote, representatives of Haredi parties held sessions with the head of the Foreign Affairs and Defense Committee in the Knesset, MK Boaz Bismuth, and with the Committee's legal advisor, as part of discussions regarding the conscription law.

Prime Minister Benjamin Netanyahu attended the Knesset building during these meetings, in an attempt to advance agreements within the coalition.

For his part, opposition leader and head of the "Yesh Atid" party, Yair Lapid, criticized the course of the discussions, describing them as "a trade and barter on the security of the State of Israel encouraged by Netanyahu."

Lapid added that "Haredi activists have established an alternative Foreign Affairs and Security Committee for themselves," noting that Knesset members from his party disrupted a meeting between the Haredim and Bismuth, demanding clarifications on the ongoing agreements.

In the backdrop of the "Degel Hatorah" party's decision to support the vote, reports indicated that party representatives held consultations with Rabbi Dov Lando, the leader of the Haredi-Lithuanian stream, who approved voting in favor of the budget to maintain the coalition.