The Cabinet Approves the Emergency Budget for 2026 and Refers It to the President for Endorsement

SadaNews - In its weekly session today, Tuesday, the Cabinet approved the draft budget for the year 2026 to refer it to the President for endorsement according to the regulations.

The emergency budget responds to the complex political, economic, and social realities, with a likely continuation of the Israeli government withholding clearance funds. In light of this, available cash flows will be directed to essential services, foremost among them health, education, security, and social protection, while continuing to disburse a percentage of public sector salaries according to available capabilities.

The draft budget also takes into account the possibility of continued financial blockade and Israeli measures, which has compelled the government to adopt a strict austerity approach to manage resources and control spending since 2025, with efforts to enhance this during 2026 to ensure controlled spending and continuity of essential services.

According to the draft budget, total expected revenues are projected to reach 15.7 billion shekels, including clearance revenue - if released, while expected expenditures will amount to approximately 17.6 billion shekels, a decrease of 5.8% from last year's budget compared to 2025. If the occupation continues to withhold clearance funds, the budget deficit is expected to reach about 70%.

Additionally, in light of preparing a budget responsive to emergency developments, the draft budget includes increasing the emergency and urgent response allocation from approximately 40 million shekels to 516 million to deal with emergencies.

According to a statement issued by the Government Communication Center, in light of increasing the response to the complexities of the financial situation for the 2026 budget, the Ministry of Finance will intensify efforts to enhance local revenues, without affecting low-income groups, alongside significant cuts in various spending items that do not touch essential services, while continuing government support for water, electricity, fuel, camps, and health insurance services, amounting to around 1.3 billion shekels, with a serious review of this governmental support to ensure it reaches the most needy groups.

In this context, and in response to the difficult economic conditions, especially for low-income groups, social protection allocations for 2026 will approach 1.2 billion shekels through various official institutions, in addition to support resources being mobilized through alternative entities, intersecting with the item on emergency and general expenses included in the draft budget.

Moreover, as part of the government's steps and reform program, a reduction in the salary bill for 2025 has been achieved of about 120 million shekels, while the government will continue to take further measures for 2026 and a complete halt to new appointments. Significant progress has also been made in reconciling with local authorities and electricity and water companies (what is known as net lending), which has been controlled by more than half during the past year, and additional reform measures will continue throughout 2026.

In another context, the draft budget includes a direction towards completing necessary development projects currently underway at a cost of 427 million shekels, alongside enhancing expected external support, which is expected to reach a total of 880 million shekels across various sectors.