Israel Military Warns Budget Dispute Risks National Security

Israel's endless wars have torn apart its finance and defence ministries as costs spiral out of control right before critical budget votes must be made. The two government departments are fighting over money while the nation faces a perfect storm of conflicts that is straining the state budget to its breaking point. The military has issued a stark warning: if this dispute does not resolve immediately, it could put the country's very security at risk.

Since October 2023 kicked off the war in Gaza, Israel has entered its longest stretch of sustained fighting ever recorded in its history. Soldiers are deployed across Lebanon and Syria while occupying both Gaza and the West Bank, all while preparing for a potential clash with Iran. Eyal Zamir, Chief of Staff of the Israeli military, told officials that these expensive wars are being fought with "empty coffers."

The government tried to plug the hole by injecting an extra 15 billion shekels into the military budget, which YNet reported would push the total for 2026 up to 184 billion shekels. That is roughly $60.8bn in funding, a near-record sum that trails only the massive outlay of 188 billion shekels during the first year of the Gaza war. Yet even this record-breaking spend has not stopped the argument between ministries over how much to pay and how to manage it.

Tensions have been building for some time now, with the two sides locked in a dispute over the scale and control of military spending. In late August, reports suggested the fight would continue even after that new money was approved. Senior finance officials flatly rejected the military's claim that they were "on the edge of the abyss." Instead, they warned that granting every demand could push military spending to nearly one-third of the entire state budget.

"Everything costs money," said Yossi Mekelberg, a senior consulting fellow at Chatham House speaking to Al Jazeera. "Their only mode of operation is using military force... but they never seem to want to talk about paying for it." He listed the bills piling up: hardware, ammunition, injured soldiers and their benefits. It all needs paying for, which officials rarely discuss.

The political mess makes things worse. Politicians scramble for small, uncompromising parts of the electorate that refuse to look past their own interests. Finance Minister Bezalel Smotrich finds himself in a tight spot. His far-right Religious Zionist Party might not even pass the electoral threshold to sit in the next Knesset. On one hand, he needs support from hardcore nationalists demanding more military cash and occupation of the West Bank. On the other, as finance minister, he has to actually pay for it all.

Briefings coming out of the Israeli military blame foot-dragging by the Finance Ministry for potential spending cuts. This includes a sharp reduction in reserve forces within the Northern and Southern Commands. Meanwhile, the West Bank Division will stay at current levels despite rising tensions and security warnings following a wave of pogroms against Palestinians there. The military has also warned it must scale back intelligence gathering because operations rely on expensive technology that simply cannot be afforded right now.

The military has issued a stark warning. They must prepare for escalation with Iran, the Houthis in Yemen, and pro-Iranian Shia militias in Iraq. This preparation demands continuous, costly training. It also requires adequate stocks of spare parts and munitions.

Michael Ben-Gad, an economics professor at City St George's, University of London, offered a sharp perspective on the blame game. "Struggling departments often blame the Ministry of Finance for their own problems," he said. "Much in the way that the government of developing countries sometimes blame the IMF." He noted that most people in the ministry have family in the army or served themselves. The Ministry will ensure funding arrives. Political difficulty remains high, especially close to an election. Leaders must not appear to oppose the military.

Smotrich faces a specific choice. Ben-Gad explained his dilemma clearly. "Smotrich can either pay now and raise taxes after the election," he said. "Or pay now and then criticise the next government for doing just that." Few ministers show appetite to curb Israel's military endeavours despite warnings of empty coffers.

In the occupied West Bank, the Israeli army announced a widescale deployment plan. They aim to stem unrestrained settler violence. Many in the government, including Smotrich, have been accused of encouraging this chaos. Meanwhile, Israel prepares for conflict escalation with Iran. Billions of dollars are being spent to replenish munition supplies expended in the last war and against neighbours.

Nimrod Flaschenberg told Al Jazeera about the recurring financial pattern. "It's like a rule of nature," he said. "Every year, the Israeli army asks for more money." He noted that every year the Ministry of Finance imposes a cut of around one to two percent across all other departments to pay for it. A fresh military doctrine is developing right now. The army establishes front lines in enemy territory with what they call dead zones behind them.

Not one frontrunner in October's election questioned the wisdom of that tactic. Flaschenberg warned about the cost implications. "If this is the new doctrine, then it could be an expensive one," he said. Those frontlines will need replenishment with both manpower and equipment. There might be disagreements over deployment capacity eventually. But not on the doctrine of building it up.