Defense Ministry chief says Treasury ‘delaying dozens of critical deals’ in clash over budget

Defense Ministry director Amir Baram slams the Treasury for “delaying the signing of dozens of critical deals that affect fundamental security,” as the two bodies continue to clash over Israel’s budget.

Last week, Finance Minister Bezalel Smotrich harshly criticized the defense establishment for inefficiently managing its spending, as he unveiled the principles of the 2026 state budget following two years of ballooning war costs.

This morning, Baram convened the ministry’s management for a discussion on “managing the defense budget against the backdrop of developing security threats.”

“After two years of an intense and unprecedented multifront war, which included intensive activity by the defense system on seven fronts, the Finance Ministry is diverting attention and focusing on issues whose impact is minimal compared to the severe security threats emerging from Iran and other nearby and distant arenas,” Baram says at the meeting, according to remarks published by the ministry.

“In light of the focus of our enemies’ efforts, the State of Israel is obligated to invest now in massive procurement, in an emergency format. We must act in every way to restore worn-out combat units to full operational readiness,” he continues.

“Instead, the Finance Ministry is holding back the Defense Ministry and delaying the signing of dozens of critical deals worth billions of shekels, including munitions, spare parts for tanks, drone acquisitions for combat units, protection for communities along the Lebanon and Gaza borders, and more. The Finance Ministry is also refusing to sign contracts for the construction of the barrier on the eastern [Jordanian] border, contrary to the decision of the Defense Procurement Ministerial Committee and despite the clear emergence of threats,” Baram says.

He adds that the defense establishment is “committed to drawing lessons and improving efficiency, but while the Finance Ministry claims that we are repeating past mistakes from after the Yom Kippur War, when the defense budget stood at 35% of GDP, now, after a year of intense war, the defense budget stands at 6.7% of GDP, and our budgetary request would set it at only 5% of GDP in two years.”

To date, the two-year war has cost the economy NIS 250 billion ($76 billion), out of which NIS 180 billion were direct costs for defense and security needs, according to Smotrich. This year’s defense budget has already reached NIS 163 billion, and in 2026, it is projected to be around NIS 90 billion or 4.5% of GDP, according to the finance minister.

According to the timetable presented by the Finance Ministry, the 2026 budget will be submitted for government approval on December 4. The budget will then be submitted to the Knesset for approval in its first reading in early January, and in second and third readings in March. By law, the budget needs to be passed by the end of March, or new elections will be triggered.

Sharon Wrobel contributed to this report.