{"id":262916,"date":"2026-01-29T02:48:10","date_gmt":"2026-01-29T02:48:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/262916\/"},"modified":"2026-01-29T02:48:10","modified_gmt":"2026-01-29T02:48:10","slug":"2026-state-budget-passes-first-reading-in-knesset-with-partial-haredi-support","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/262916\/","title":{"rendered":"2026 state budget passes first reading in Knesset with partial Haredi support"},"content":{"rendered":"

In a win for Prime Minister Benjamin Netanyahu, lawmakers on Wednesday evening voted 62-55 in favor of the first reading of the 2026 state budget, following a two-day delay caused by last-minute Haredi demands related to the coalition\u2019s ultra-Orthodox draft exemption bill<\/a>.<\/p>\n

Under the state budget bill, expenditures for fiscal year 2026 will be around NIS 811.74 billion ($262 billion), consisting of a standard budget of some NIS 580.75 billion ($187 billion) and a development and capital account budget of approximately NIS 230.99 billion ($74.5 billion).<\/p>\n

The budget includes NIS 112 billion ($34 billion) for defense, NIS 413 million ($133 million) for the Interior Ministry, NIS 3.34 billion ($1 billion) for the Foreign Ministry, NIS 63 billion ($20.3 billion) for healthcare, and NIS 887 million ($286 million) for religious services.<\/p>\n

Among the major reforms featured in the 2026 budget are an opening up of the banking sector<\/a>, a proposed loosening of tariffs on dairy<\/a> imports, as well as an NIS 30 ($10) tax on e-cigarettes, marking the first attempt by an Israeli government to regulate the burgeoning market.<\/p>\n

While the budget was initially supposed to be placed before the Knesset for its first reading on Monday evening, the vote was delayed<\/a> after Haredi lawmakers objected to various changes<\/a> to\u00a0the military enlistment bill recommended by Knesset Foreign Affairs and Defense Committee legal advisor Miri Frankel Shor, including her call to pass the law \u201cas a temporary provision for a maximum period of five years.\u201d<\/p>\n

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This delay placed additional pressure on Netanyahu\u2019s coalition, which had to begin voting on the budget this week in order to meet a legally mandated March 31 deadline. Under Israeli law, if the government fails to pass the budget by the end of March, the Knesset will automatically dissolve, triggering early elections three months later. Elections are currently slated to be held by late October.<\/p>\n

\t\"\"<\/a>
\n\t\tPrime Minister Benjamin Netanyahu in the Knesset plenum, January 28, 2026. (Noam Moskowitz, Office of the Knesset Spokesperson)<\/p>\n

Following feverish last-minute negotiations between Knesset Foreign Affairs and Defense Committee chairman Boaz Bismuth and representatives of the Haredi parties on Wednesday, both the Shas and Degel HaTorah factions supported the bill while Agudat Yisrael\u2019s three MKs voted against it. Shas chairman Aryeh Deri was absent for the vote.<\/p>\n

Degel HaTorah and Agudat Yisrael are the two factions comprising the larger United Torah Judaism party.<\/p>\n

In a statement following the meeting, a spokesman for Degel Hatorah spiritual leader Rabbi Dov Lando said that the faction would \u201csupport the budget law on first reading and will insist that the conscription law be completed before bringing the budget law to second and third readings.\u201d<\/p>\n

According to Hebrew media, Bismuth agreed to hold a series of talks to iron out Haredi objections to parts of the bill. Later in the evening, several Yesh Atid MKs entered<\/a> the staff area outside Bismuth\u2019s office, apparently disrupting further talks with representatives of the ultra-Orthodox parties and drawing condemnation<\/a> from Likud.<\/p>\n

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\u05dc\u05db\u05df \u05d6\u05d4 \u05d1\u05e1\u05d3\u05e8? pic.twitter.com\/T7bJRKy64w<\/a><\/p>\n

\u2014 \u05d9\u05e7\u05d9 \u05d0\u05d3\u05de\u05e7\u05e8 (@YakiAdamker) January 28, 2026<\/a><\/p>\n

Explaining why his Agudat Yisrael faction was voting against the budget, UTJ chairman Yitzhak Goldknopf told lawmakers ahead of the vote that his community feels \u201cpersecuted\u201d by a government that arrests yeshiva students who dodge the IDF draft.<\/p>\n

\u201cThere are things that are more important than a budget, and in their name we oppose the budget. The State of Israel without the Torah of Israel does not need a budget,\u201d he stated, accusing the government of turning yeshiva students into \u201ccriminals\u201d and \u201csecond- or third-class citizens.\u201d<\/p>\n

\u201cOur intention in this vote is not to overthrow the government,\u201d he continued, adding a direct appeal to Netanyahu to postpone the budget vote until a law regulating the status of yeshiva students can be passed.<\/p>\n

Agudat Yisrael opposes the current enlistment bill on the table, despite the fact that it would exempt yeshiva students from conscription, because it contains sanctions.<\/p>\n

Opening the debate on the budget, Finance Minister Bezalel Smotrich boasted of Israel\u2019s economic performance over the past two years of war, declaring it \u201cnothing less than amazing.\u201d<\/p>\n

\t\"\"<\/a>
\n\t\tAgudat Yisrael chairman (center) speaks with members of his party during a vote on the 2026 state budget, January 28, 2026. (Oren Ben Hakoon\/Flash90)<\/p>\n

\u201cAfter two years of a costly war, the State of Israel is a powerhouse of strength. We predict a 5.2 percent growth in GDP in the coming year. Inflation is returning to the target range, between 2% and 2.5%, we are curbing the cost of living and preserving the value of the money of Israeli citizens,\u201d he said, calling on the governor of the Bank of Israel to \u201cgreatly lower the interest rate, quickly, and free the economy for growth.\u201d<\/p>\n

The state budget, he asserted, \u201cis not just an economic document, it is a declaration of intentions and tells the world that the State of Israel and the Israeli economy are stronger than ever.\u201d<\/p>\n

As Smotrich spoke, several dairy farmers were removed from the visitors\u2019 gallery after donning T-shirts reading \u201cdairy farmer\u201d to protest his proposed dairy reform.<\/p>\n

The budget was also slammed by opposition politicians, with Opposition Leader Yair Lapid claiming it benefitted draft dodgers and the corrupt at the expense of the middle class, while Blue and White chairman Benny Gantz accused Netanyahu and Smotrich of drafting a budget more focused on the government\u2019s political survival than the good of the country.<\/p>\n

Speaking with The Times of Israel ahead of the vote, Yesh Atid MK Vladimir Beliak complained that \u201cthere are almost NIS 7.5 billion ($2.4 billion) in coalition funds, which is an all-time record\u2026and all the benefits are received only by sectors close to the government.\u201d<\/p>\n

At the same time, he said, while \u201cthere is a cut in building classrooms and a cut in early childhood education.\u201d<\/p>\n

\t\"\"<\/a>
\n\t\tYesh Atid MK Vladimir Beliak being removed from the Special Committee for the Communications Law at the Knesset, December 8, 2025. (Yonatan Sindel\/Flash90)<\/p>\n

In addition to passing the first reading of the 2026 budget, lawmakers voted 59-54 to pass the 2026 Arrangements Law in its first reading in the Knesset. The Arrangements Law, a key part of the annual budgetary legislative package, determines how funds will be disbursed.<\/p>\n

They also voted 62-55 in favor of the first reading of the Deficit Reduction and Budgetary Expenditure Limitation Bill, setting the deficit ceiling for 2026 to 3.9 percent of GDP. The bill will be forwarded to the Knesset Finance Committee for preparation for its final two readings.<\/p>\n

The Bank of Israel deems 3.9% as too high, since it does not allow for a reduction in the debt burden.<\/p>\n

The budget deficit slipped to 4.7% of GDP in 2025 from 6.8% in 2023. A spike in defense costs due to the Gaza war pushed the deficit higher over the past two years.<\/p>\n

Reuters contributed to this report.<\/p>\n


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