"There is a real war between the Ministry of Finance and the Ministry of Defense," admitted a very top economic source in Jerusalem, who is involved the budget talks between the ministries, on Tuesday.
There was no progress in the last meeting by ministries' representatives Thursday before Prime Minister Benjamin Netanyahu, Minister of Finance Yair Lapid, and Minister of Defense Moshe Ya'alon. At that meeting, Netanyahu said that he would make a decision on Monday or Tuesday, but he did not do so, because of the harsh mutual recriminations and wide differences between the ministries. Since that meeting, there have been almost daily meetings in various forums, at the Prime Minister's Office.
Some of the tensions erupted at a meeting of the Knesset Labor, Health and Welfare Committee meeting on Monday, in a bitter exchange between Ya'alon and Deputy Budget Director (Defense) Meir Bing, with Ya'alon accusing Bing of lying, deceit, and breaking promising.
"Yesterday's meeting was utterly fantastical," said a top Ministry of Finance source. "They say there isn't enough money to defend Israel, and that the Ministry of Finance is endangering Israelis' security. But in the same breath, the defense minister in person demands a pay raise, and that he will fight for this. So decide: either there is money or there isn't money."
The Ministry of Finance is demanding that the Ministry of Defense comply with the agreement to cut the defense budget by NIS 3 billion, as agreed in the budget, but the Ministry of Defense says that the Ministry of Finance is really demanding a NIS 7 billion budget cut, because of unforeseen "price hikes" and incidents. There is no way to close this NIS 4 billion chasm, except by slashing the budgets of other ministries.
Meanwhile, since Sunday, the Knesset Joint Defense Budget Committee, chaired by MK Ofer Shelah (Yesh Atid), has been meeting behind closed doors to discuss possible cuts to IDF salaries, pensions, and rehabilitation. The Accountant General's Office has released figures stating that the IDF's pension budget was NIS 4.95 billion in 2012, its rehabilitation budget was NIS 2.55 billion, and its family payments budget exceeded NIS 2.4 billion, for a total of NIS 10 billion.
The Army will march in place
The Ministry of Defense warns that a NIS 51 billion means that "the Army will march in place, unable to procure equipment, train, and grow stronger." Ministry sources say that the current budget renders it impossible for the IDF to draw up a work plan for the coming years. "This is devastating," said a source, adding, "Under these circumstances, no plane can take off, skills will be eroded, harming the ability to provide defense. The army won't go bankrupt, but it won't be able to move, just sit and survive."
The Ministry of Defense is demanding a budget supplement of NIS 4.5 billion, and expects Netanyahu to decide the battle against the Ministry of Finance because of "the absence of any dialogue with the Ministry of Finance," in the words of a Ministry of Defense source.
Ministry of Defense sources have been saying in the past few days that the defense budget is NIS 11 billion less in nominal terms than the NIS 62 billion recommendation by the Brodet Committee. The sources say that even as the defense budget has shrunk, the ministry and IDF have to bear higher costs for fuel, electricity, arnona (local property tax) and other fixed costs.
Updated Ministry of Defense figures indicate that the number of new career personnel requiring income support payments surged to 10,100 people in 2012, because they earned less than the minimum wage.
Published by Globes [online], Israel business news - www.globes-online.com - on October 30, 2013
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