In the midst of the debate about whether to cut the defense budget, the committee for reviewing the defense budget, priorities and streamlining, chaired by Prof. Asher Tishler today submitted its final report. Its key recommendation is to lower the retirement age of career IDF officers to create a younger army, and to encourage high quality persons to serve. The recommendation is a complete contradiction of the Ministry of Finance's demand to raise the retirement age in the IDF.
The Tishler Committee was appointed in September 2011 by Ministry of Defense director general Udi Shani.
Just two years ago, a new agreement for career officers was signed, which raised the IDF's retirement from 45 to 50. The Tishler Committee says that it is not clear whether this measure will save money in the defense budget, and advises cutting the retirement age to 45, or even 40. The committee says that the IDF's strength comes from in large part because it is a "young army that is entrepreneurial and innovative in its character, with fairly rapid promotion of outstanding officers, who would not stay in the army were their promotion slow."
The Tishler Committee added that raising the IDF's retirement age was liable to affect its power and the country's security, because many of the officers whom the IDF wants would prefer not embarking on careers in it, because they would not find another job at a higher age, because of the negligible chances of starting a second career at 50.
Tishler said that one of the committee's recommendations is to abolish the bridge pension available to retired career officers and NCOs, which costs billions of shekels. Instead, retiring officers and NCOs should receive a retirement grant on an individual basis, and that the new retirement model should be anchored in legislation to prevent future arguments between the Ministry of Defense and the Ministry of Finance.
A senior Ministry of Defense said today that the Tishler's model was "creative, includes the interest of streamlining the defense budget, contributing to the national economy, and the ability of a career officer to start a second career."
The Ministry of Defense said that it would thoroughly study the recommendation, and that it would examine the financing resources needed to implement the new model over its first years.
Tishler announced the recommendations at a press conference at Beit Sokolov, where the Israel Journalists Association is located, in Tel Aviv. The Ministry of Defense was responsible for the invitations. Tishler said, "I do not know the position of the Ministry of Defense toward the findings of the committee. We'll know this later on, when we see the ministry's response to the report."
Brodet Report budget targets realistic
Tishler said that since the committee was established, he and his colleagues held long meetings with officials at the Ministry of Defense, IDF, and the Ministry of Finance. Committee members also talked at length with David Brodet, whose proposals for ten-year budget planning by the defense establishment was approved by the Olmert government in 2007. The Brodet Committee pointed to a NIS 147 billion shortfall in the army's budget in 2008-17.
Tisher and his colleagues concluded that the Brodet Report offered a full and detailed response to the question of the right size of the defense budget, calling the report "strategic". The Tishler Committee said that the Brodet Committee's defense budget targets for 2013-17 were realistic, and should be updated annually on the basis of the Consumer Price Index (CPI), in order to maintain the IDF's ability to fulfill its missions, including payment of salaries, procurements, training, and weapons development.
The Tishler Committee advises that the Ministry of Defense and the Ministry of Finance should present a ten-year budget to the cabinet each year, which would enable the Ministry of Defense to operate efficiently and consistently over time. The committee called this a "rolling budget", which would enable the government to deal with new security challenges in a sophisticated way.
The Tishler Committee advises the government to take into account Israel's changing political and social environment, deal with the security consequences of the changing geopolitical environment, and understand the significance of budgets on the IDF's preparedeness to handle them. The committee recommends when the government gives the IDF a new mission that is not in the multiyear plan, either it provide budget supplements needed to carry out the mission, or if the IDF diverts current budgets, which missions in the multiyear plan the IDF should forego.
More money for R&D
The Tishler Committee also relies on the Brodet Committee on the military's R&D budget, advising to raise this budget from NIS 760 million to NIS 995 million a year (in 2012 prices), in line with the amount in real terms set by the Brodet Committee. The Tishler Committee also advises that the military's R&D budget should not be part of the IDF's day-to-day budget.
The Tishler Committee also advises the establishment of an external experts committee to review how the defense establishment manages its intellectual property rights on defense R&D. It advises recording the IDF's intellectual property rights and use rights to weapons development and systems developed in joint projects between the Ministry of Defense and defense companies. The committee also advises reviewing whether the government fully compensates for use of these systems by third parties.
Support moving IDF bases to the Negev
The Tishler Committee estimates the value of land in central Israel that the IDF's move to new bases in the Negev will free up at NIS 46 billion. This means that the government will not have to supplement the defense budget to finance the move.
However, the Tishler Committee points to obstacles to the move to the Negev, including a shortage of credit, especially the credit caps to the construction industry. This problem is irrespective of the global economic crisis, which raises serious concerns about the Israeli economy's ability to take on the huge task of moving the IDF to new bases in the Negev, which will require huge credit to contractors. The committee says that the best ways to improve the chances of the move's success are to improve the debt conditions and to ease regulatory restrictions through government participation. The government should guarantee 10-15% of the loans granted by financial institutions to contractors and developers during the project.
Published by Globes [online], Israel business news - www.globes-online.com - on August 19, 2012
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