Treasury officials warn ultra-Orthodox draft exemption law will cost Israel dearly
Finance Ministry budgetary department says annual cost to economy due to current burden on reservists is $8 billion, but can be relieved by drafting more Haredi men to combat roles
Sam Sokol is the Times of Israel's political correspondent. He was previously a reporter for the Jerusalem Post, Jewish Telegraphic Agency and Haaretz. He is the author of "Putin’s Hybrid War and the Jews"

Treasury officials have formally come out against a proposed bill championed by the government regulating ultra-Orthodox military draft exemptions, saying it would “result in far-reaching negative economic effects” for the country, according to a position paper obtained by The Times of Israel.
According to an internal analysis of the economic impact of the legislation issued by the Finance Ministry’s budget department, the bill — which would enshrine the exemption of ultra-Orthodox men from military service — has “significant flaws” and would fail to ease the burden on Israel’s reservists.
The Treasury position paper was first reported on Sunday night by Channel 12 news.
Even before the outbreak of war on October 7, 2023, the lack of workforce participation by members of the ultra-Orthodox community cost the economy tens of billions of shekels annually and the added burden of service placed on reservists by their exemption is expected to cost billions more in the future, the report stated.
Citing defense establishment estimates, the Finance Ministry’s budget division stated that “the current security needs place a heavy burden” on the reservists, requiring hundreds of thousands of them to serve up to 60 days and costing around NIS 30 billion ($8.2 billion) annually.
Recruiting as few as 1,000 additional Haredim for combat service annually would give reservists about two more weeks off a year, the paper predicted, pointing to the ultra-Orthodox as the country’s best resource for untapped military manpower. The same benefits would not be realized if they enlist to volunteer for nonmilitary roles under the alternative national service program.
“There is a definite economic need to increase the scope of recruits to the IDF from this population in the broadest possible way,” the paper asserted.
“National service or ZAKA does not ease the burden of military reserves service,” it added, referring to the ultra-Orthodox search and rescue group.

The Haredi religious and political leadership have fiercely resisted any effort to force members of the community to serve in the military. The community’s longstanding exemptions from the mandatory military draft were challenged in June when the High Court of Justice ruled that there is no legal basis for their decades-long exemption.
Critics say the decades-long arrangement giving the ultra-Orthodox a pass unfairly burdens the rest of the population, a sentiment that has intensified since the October 7, 2023, Hamas onslaught and the ensuing war, in which more than 780 soldiers have been killed and some 300,000 citizens were called up to reserve duty.
Due to the burden of the war, reservists have spent long months in the army during which time they are unable to work. Usually, reservists only serve up to one month a year.
A government-backed bill dealing with the issue of ultra-Orthodox conscription is currently stuck in the Knesset Foreign Affairs and Defense Committee, whose chairman, Likud MK Yuli Edelstein has said that it will only pass if lawmakers can reach a “broad consensus” on the matter.
Addressing the committee last week, Defense Minister Israel Katz called for annual recruitment targets within what he termed a reasonable range, playing up the idea that half of eligible draftees could end up serving while the rest continue studying in yeshivas.
The Finance Ministry’s report pushed back against such policies, stating that allowing anybody to remain exempt for the sake of full-time Torah study would undercut recruitment efforts.

Establishing general recruitment targets, meanwhile, will “lead to a reality where in practice no individual is obligated to enlist, since it is not defined for whom the collective recruitment obligation applies,” it continued, instead arguing that “immediate application of economic sanctions is a necessary condition for the success of the plan.”
According to the ministry, the most effective way of boosting enlistment would be targeting stipends received by Haredi men who engage in full-time study in yeshivas, daycare subsidies for their children, National Insurance benefits, benefits when buying a home and for municipal tax — along with prohibitions on obtaining a driver’s license or traveling abroad.
Delaying or canceling such sanctions would “significantly harm” enlistment efforts, the ministry argued, less than two months after a bill to circumvent a High Court ruling preventing state-funded daycare subsidies from going to the children of ultra-Orthodox men who evade the draft was pulled from the Knesset agenda.

The military has said that it currently requires some 10,000 new soldiers — 75 percent of whom would be combat troops — amid the multifront war which has seen Iran-backed proxies in Lebanon, Iraq, and Yemen all fire at Israel in support of Gaza.
Last month the Israel Defense Forces sent out 1,000 draft orders to Haredi men, the first batch out of a planned 7,000, prompting Haredi demonstrators to block the Route 4 highway in central Israel in protest.
A spokesman for Finance Minister Bezalel Smotrich did not reply to a request for comment.
Times of Israel staff contributed to this report.