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As the Caesarea Forum on the defense budget wound up yesterday, David Brodet, who chairs the government-appointed committee for reform of the defense budget told TheMarker that Dan Meridor's proposal to reduce the budget to 5 percent of the gross domestic product (GDP) "makes sense." Since the committee has not reached a final decision, he agreed to say only that "the defense budget's percentage of the GDP will decrease, and the budget will be a multi-year document." He refused to confirm that the budget amount would increase, but that it would be a lower percentage of GDP.

Finance Minister Abraham Hirchson said the discussion on the defense budget should not be held until crucial decisions have been made on certain issues, such as a necessary reform of the defense establishment.

Kobi Haber, head of the Finance Ministry's Budgets Division, said the ministry supports a multi-year defense budget, but on condition it binds future governments and the defense establishment, and not merely serve as a basis for additional budget requests. Haber added the defense budget is about NIS 50 billion, or 8 percent of GDP. He expressed support for the proposal to establish a civilian body alongside the government to supervise the defense budget, saying "this involves 20 percent of the state budget, and it is unreasonable that only three people in the treasury know about this."

Former finance minister and Foreign Affairs and Defense Committee chair Dan Meridor said that the defense budget could be reduced from 8 percent to 5 percent of the GDP, adding that the budget cut in shekel terms is marginal - only $75 million - assuming GDP growth. Meridor said that responsibility and authority for the defense budget lies with the government, but is in fact a prisoner of the military establishment, and a civilian body advising the government in defense budget discussions is essential.

Major General Ido Nehushtan, who heads the IDF planning division, voiced his support for civilian supervision of the defense budget. A multi-year budget tailored to defense needs is necessary, he said.

The basis for the discussions was a preliminary document prepared by the Israel Democracy Institute's Caesarea Forum, which calls for a reform of the defense budget based on multi-annual strategic planning.

Defense Minister Amir Peretz said he supports merging all government military industries. The goal should be "one large private defense industry and one large government defense industry," Peretz said at the Caesarea Forum.

"A decision to merge the Israel Military Industries and Rafael should be reached quickly," the defense minister said, "hopefully encouraging the defense industry to merge as part of a long-term vision."

Peretz added that he supports the continuation and expansion of the Merkava project, although the manufacturers claim that no orders have been placed for 2007. As a self-proclaimed proponent of defense and social issues, Peretz emphasized that he had instructed the IDF to incorporate areas of high unemployment and front lines when considering options that impact employment.