Israel’s Controversial NIS 755 Billion ‘War Budget’ Passes, Critics Warn of Economic Fallout
Israel’s parliament on Tuesday passed the long-awaited 2025 state budget following a tense session overshadowed by concerns over hostages still held by Hamas in Gaza. Lawmakers approved the 755 billion shekel (about $205 billion) spending plan in a 66-52 vote, narrowly avoiding a government collapse that would have been triggered had the budget not been passed by March 31.
The debate grew emotional inside the Knesset plenum as families of some of the 59 hostages still believed to be in Gaza entered the chamber, holding up posters of their loved ones. Opposition lawmakers joined them in displaying signs bearing the number “59.”
Outside parliament, protesters sought to block lawmakers from entering, urging a return to negotiations for the hostages’ release. Knesset Speaker Amir Ohana condemned the disruptions, stating, “There is freedom of expression in the State of Israel, but no one is free to forcibly block the democratic process in the Knesset.”
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Finance Minister Bezalel Smotrich hailed the budget as critical for both national security and economic stability, declaring it a “war budget” designed to ensure Israel’s military edge and to spur growth. “We promoted measures that will support growth and allow the Israeli economy to maintain its strength and continue to prosper,” Smotrich said following the vote. “This is a war budget and, God willing, it will also be the victory budget.”
However, the opposition vehemently criticized the plan, citing rising costs of living and accusing the government of ignoring citizens’ financial burdens. Avigdor Liberman, leader of the Yisrael Beytenu party, lambasted the administration for increasing VAT, National Insurance payments, and utility prices. “They haven’t cut a single penny in coalition funds,” he lamented.
National Unity party chairman Benny Gantz echoed Liberman’s concerns, warning lawmakers, “Your detachment and arrogance will come back to you with interest.” The newly passed budget, he said, “will be felt by all citizens of Israel all year long and you will ultimately pay the bill.”
Despite the controversy, the passage of the 2025 spending bill averts a governmental collapse and sets the stage for Israel’s economic and security priorities for the coming year.
