Cabinet increases defense budget by NIS 2.75B

Security establishment initially demanded NIS 4.5B of surplus funds; Lapid agreed to transfer NIS 1B; sides eventually agree on NIS 2.75B. Treasury disappointed: Money could have been designated for growth engines

Attila Somfalvi|Published: 10.31.13 , 17:21

The Political-Security Cabinet on Thursday decided unanimously to transfer NIS 2.75 billion ($780 million) in surplus funds to the defense budget. Both Defense Minister Moshe Ya'alon and Finance Minister Yair Lapid supported the decision, which followed the cabinet's decision from May.

In addition, it was decided to set up a public committee to probe the defense budget and its components. Furthermore, a team headed by the Prime Minister's Office director, Harel Locker, will be formed in order to expedite the dismantling of IDF bases and structures in central Israel.

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The defense establishment initially demanded NIS 4.5 billion ($1.2B). Lapid was willing to allocate NIS 1 billion ($280 million) for the defense budget, while Prime Minister Benjamin Netanyahu suggested that the government transfer NIS 2.8 billion ($800 million). Eventually the sides agreed on NIS 2.75B.

"We've unanimously reached a decision that balances the major security challenges facing the State of Israel with the need to continue to navigate Israel's economy responsibly amid the global economic crisis," Netanyahu said after the meeting.

Lapid said "the prime minister decided to add to the defense budget despite my objection. We still insist that the security establishment should be administered with economic responsibility and become more efficient. We will not accept the fact that the middle class shoulders the burden and the security establishment does not.

"I am pleased that we were able to prevent the transfer of the entire sum the security establishment requested, because we need the NIS 1.75 billion ($500 million) for dorms, health, education and measures that will lead to a reduction of the cost of living in Israel," the finance minister said.

The Treasury was disappointed by the cabinet's decision. "The security establishment is taking Israel's citizens captive. This money could have been designated for growth engines such as education, welfare, investments and more. If we considered reducing the taxes imposed on the citizens, now this will be much harder to do," a Treasury official said.

The cabinet was scheduled to discuss the defense budget issue on Wednesday, but the debate was delayed following lengthy discussions between senior Treasury and Defense Ministry officials.

IDF Chief of Staff Benny Gantz sought to reduce budget cuts by NIS 3.5 billion ($990 million), Minister Lapid, Minister Lapid, who was against the reduction, told Ynet on Thursday "I will not be seen to be badmouthing the IDF. Anyone who's done reserve duty in the past 20 years knows there are places from which to cut. Any brigadier-general makes more money than me as well as the prime minister."

Lapid, who spoke to Ynet prior to the cabinet's meeting, said Israel can't afford to give the army the budget it wants. "We need to address the crises that cost money and the army has to pull its weight. An entire generation is collapsing, who will enlist in 10 years if we don't deal with Israel's lost generation? Security is as important to me as it is for them (defense officials) but my job is to look at the bigger picture, to see the housing crisis, the middle class," he said.

Defense Minister Ya'alon addressed the Security Cabinet's decision: "During budget discussions, including in recent days, the discourse by various parties was irresponsible," said Ya'alon.

"It was political discourse, false and cynical in nature, which included a systematic delegitimization campaign aimed toward career public servants in the IDF, while exposing data on wages in a manipulative and twisted manner, designed to turn public opinion against them," the defense minister said.