Finance Minister Bezalel Smotrich held a special press conference this evening (Sunday), ahead of the vote on the state budget for 2026 in the Knesset plenum.
In his remarks, the minister emphasized that this is a historic moment, as this is the first time since 1999 that a government has passed a budget in an election year, and even more so during a multi-sector war.
""We are in historic times. In these very moments, the IDF and the security forces are acting decisively against our enemies, thwarting existential threats to the State of Israel. Anyone who tried to harm us was thwarted. And anyone who tries will be met with force.".
According to him, "the real victory is not only to defeat the enemy but to continue to grow despite everything.".
The minister emphasized: "In complete contrast to all the predictions and angry prophecies of the left, the commentators and economists on their own behalf - the Israeli economy did not collapse. It grew stronger. The only thing that collapsed - was the intimidation of the left.".
Smotrich presented economic data - and said: "The shekel has strengthened against the dollar by more than 20%, the Israeli stock market is soaring, Israeli high-tech recorded exits worth about 80 billion shekels, unemployment is at a low of about 3%, and inflation has fallen to about 2% - which also made it possible to lower interest rates by two percentage points.".
He later claimed that this was the result of economic policy: "This did not happen by chance. It happened thanks to our responsible, consistent, and intelligent management. Because alongside the air, intelligence, and technological superiority, which guarantees Israel's security, we are building the economic superiority that will guarantee the future of Israel's citizens. It is economic superiority that guarantees military superiority over time.".
The minister noted that the budget is being submitted for Knesset approval for the fourth time since he took office: "For the fourth time since I took office as Minister of Finance, we are submitting the state budget for 2026 to the Knesset for approval tonight. This is the first time since 1999 that a government has managed to pass a budget in an election year, and even more so during a war.".
He said, "Passing the budget tonight, especially at this time, provides essential stability to the economy alongside governmental stability that will allow the government to complete its days and complete its work, in security, the economy, settlement, reforming the legal system, strengthening the Jewish identity of the country, and more.".
""We are not taking it easy and are careful to act responsibly even within the framework of this budget. War has high costs and we are managing them responsibly and with no sense. I have said throughout the war that security costs are not an expense but an investment. The more we deepen the victory on the fronts we are currently engaged in, and the more we break the stranglehold over the State of Israel, the growth that will come immediately after the war will be very large. We are already seeing this in the economic data, and this is just the beginning. I say from here to the whole world: If these are the economic data during the war, think about what the data will be after victory. Invest now in the State of Israel, there is no better investment than that.".
According to him, the budget includes steps to lower the cost of living, including - "widening income tax brackets for the middle class, which in practice means a tax reduction of up to 10,000 shekels per year for a working family. In addition, as part of the legislation we led, starting in January 2026, combat reservists are entitled to up to 4 income tax credit points - the practical meaning is up to 12,000 shekels in income tax deductions per year for each combat reservist. You deserve this more than anyone else. In addition, we have transferred a tax exemption to new immigrants who immigrate to Israel during the war.".
In addition, he presented steps to open the banking market to competition, saying: "During the war, the banks abused the increase in interest rates and the lack of competition to raise interest rates on overdrafts, loans, credit and mortgages, and almost rolled nothing back to citizens in interest on deposits. In 2025 alone, during the war, the banks earned about 35 billion at the public's expense. Now we are returning the money to the public, in a special tax on the banks. This tax that we imposed on the banks allows us to reduce taxes for Israeli citizens in a responsible manner, without increasing the deficit.".
""In addition," the minister continued, "in the Arrangements Law, we are leading a dramatic structural reform to open the banking market to competition. We are allowing more players to enter the banking sector with lenient regulation, in order to finally introduce competition into the banking sector. The meaning for the public: less interest on the minus and more interest on the plus. This is a dramatic reform that is expected to save thousands of shekels per family each year.".
He also referred to the increase in the VAT exemption on personal imports and noted that the move was intended to "increase competition and lower prices. And it's working. Since the signing of the decree, Israelis have been buying more in the country and at cheaper prices because of the promotions and discounts that the chains are offering to cope with the competition.".
He added and detailed: "Alongside this, we continue to ensure victory in the war. We have increased the defense budget to 143 billion shekels, to ensure that the IDF and the defense establishment receive everything they need for victory - on the front and in the rear. We have invested in the production of armaments and defense systems such as Iron Dome, Arrow and Magic Wand. I want to clarify - there is no budgetary limit on the production of interceptors.".
He also mentioned investments in the reconstruction of the Gaza Strip and the North, education, health, welfare and infrastructure, "We have allocated approximately 32 billion shekels for the reconstruction of the Gaza Strip and the northern settlements, an addition of approximately 6 billion shekels to the reserve envelope in addition to more than 20 billion shekels since the beginning of the war. An increase of approximately 6.7 billion shekels in the education budget, this is the largest education budget ever. An addition of approximately 4.3 billion shekels for health, including an investment of hundreds of millions in mental health. An increase of approximately 1.8 billion shekels for welfare. An addition of approximately 7.4 billion shekels in the development of transportation infrastructure and in subsidizing public transportation. Even in times of war - we do not stop life. We strengthen it.
""In complete contrast to all the spin and distorted headlines, we care about all citizens of Israel without exception," said Smotrich. "In actions and not words, we lower the cost of living, lower taxes, open the market to competition and ensure that the tremendous achievements in the economy meet the pocket of every citizen.".
He addressed the public and said that he was aware of the difficulties: "I know how hard it is. How every product that goes into the cart is felt. How every family makes calculations. This is exactly why we are working. This is exactly why I am fighting to dismantle the monopolies and paying personal and political prices for it. I do not intend to give up. So that this hard work of ours will also be felt there, in the cart at the supermarket. So that the cost of living will decrease not only in figures - but also in life itself.".
""We are winning on the front, we are winning economically. And with God's help, together - we will continue to win.".
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