The short round of fighting involving the IDF, Syria and Iran on Saturday is likely to tilt the scales in the dispute between Minister of Defense Avigdor Liberman and Minister of Finance Moshe Kahlon on a NIS 4.8 billion addition to the defense budget over three years. Defense sources said today that the weekend's events would accelerate the decision making process on the rise in the defense budget that Liberman has been demanding. The 2018 defense budget is NIS 71.5 billion, including $3.8 billion of US military aid.
The demand for a higher defense budget aroused resentment in the Ministry of Finance, which saw it as an attempt to overturn the agreement reached with the previous defense minister, Moshe Ya'alon, two years ago. Under the Kahlon-Ya'alon accord, the Ministry of Defense has an annual budget fixed for five years, giving the IDF the benefit of certainty and the ability to plan long-term for procurement and military exercises.
Liberman justified his demand by the changes that have taken place in the Middle East since the agreement with the Ministry of Finance, described at the time as historic, was signed. He claims that the agreement does not cover the allocation of resources needed to enable the IDF to respond to the security situation that has arisen in the region with the stationing of Iranian forces in Syria and Iran's huge investment in production of precision weapons that represent a threat to Israel. Liberman sees the billions of shekels he is demanding as an indemnity for Israel's military against unplanned expenditure it has incurred since the agreement was signed. This includes the underground barrier against tunneling on the border with Gaza, erection of the separation fence in the southern Hebron Hills, and so on, such that his ministry's budget has been eroded. Such expenditure is estimated at over NIS 5 billion.
"Intelligence capabilities we've never seen before"
Talking to "Globes", a defense source recently explained Liberman's demand as arising from the introduction of "equilibrium breaking" weaponry into the region in the past two years. "We are discovering intelligence gathering capabilities in the region that we have never seen here before, in addition to advanced military systems such as S-400 ground-to-air missiles. This brings home our need to defend ourselves, and defense against just one of the threats will cost millions. There are systems here to which even the Americans have no answer."
Liberman himself has said in the past that Prime Minister Benjamin Netanyahu supports his demand for a higher defense budget, because of the new threats not taken into account in the agreement between Kahlon and Ya'alon. Netanyahu himself recently told "Globes that "Changes have to be made to the state budget without breaching the budget framework, and I take the needs of the defense budget seriously."
Liberman seeks to obtain at least part of the sum he is demanding as early as the current budget year, in order to start to finance research and development for vital systems that in any case will not be operational for at least another five years. The Ministry of Defense has not specified what these systems are, but hints that they will be capable of providing a response to at least some of the threats developing in the Middle East.
The Ministry of Finance's opposition to expanding the defense budget led to the setting up of an inter-ministerial committee a month ago. The committee is due to report to the security-diplomatic cabinet after the Passover holiday, that is, in about two months' time.
Published by Globes [online], Israel business news - www.globes-online.com - on February 12, 2018
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