Overview
- Finance Ministry officials will draft the bill for an initial Knesset vote by mid-January, with final approval required by March 31.
- The cabinet raised the deficit ceiling to 3.9% from 3.2% and authorized about NIS 15 billion in additional deficit spending.
- The defense allocation reflects a compromise between Defense Minister Israel Katz and Finance Minister Bezalel Smotrich, replacing an earlier NIS 90 billion draft after higher requests.
- The framework assumes an average mobilization of roughly 40,000 reservists in 2026 to reduce the burden after large wartime call-ups.
- If defense spending overshoots the target, across-the-board ministry cuts would cover the gap, while the economic plan taxes banks’ excess profits and reduces income taxes.