Defense Budget for 2015 Could Rise by NIS 11b to More Than NIS 70b

The total defense budget for 2014 — 51 billion shekels net plus revenue-continent expenses — came to 57.7 billion shekels.

IDF Spokesperson's Unit

Treasury officials expressed surprise earlier this month when Defense Ministry Director General Dan Harel spoke of an 11-billion-shekel ($3.2 billion) increase in next year’s defense budget, but it now seems that even before Operation Protective Edge defense officials had asked for a 10-billion-shekel budget hike. This, according to a senior defense official who spoke to TheMarker yesterday.

That would bring the net budget for defense from 52 billion shekels to 62 billion shekels. (The net budget does not include spending items with separate funding sources). The source, who spoke on condition of anonymity, said political and defense officials might request an even larger increase. In wake of last week’s U.S. announcement of increased oversight of defense shipments to Israel, such as the transfer of Hellfire missiles, for example, Israel could decide to substantially increase ammunition stockpiles in the country. That could affect the Israeli defense budget for a number of years.

“This war proved that anyone who thought we were becoming more like Switzerland was wrong. Hamas is a small event among the range of potential threats to Israel,” the source said, adding, “Anyone who wants to be prepared for all of them must put a lot of money into the research and development stage. Money was put into Iron Dome [the anti-missile system] in time,” adding that the solution to the Hamas-built tunnels leading from the Gaza Strip into Israeli territory could cost significant amounts of money.

Referring to Finance Ministry officials, the source said that figures in Israel who in the past several years had insisted on cutting defense spending had to be aware that the funding drawdown would eventually cripple the Israel Defense Forces. That was about to happen during the first half of this year, he said, but the country’s political leadership came to its senses and provided the necessary funding before the outbreak of this summer’s hostilities.

The defense source said the cost of Operation Protective Edge after 37 days of fighting has exceeded 8.7 billion shekels.

When it was pointed out to him that the treasury had estimated the cost at 6.5 billion shekels in costs, he stressed that the Finance Ministry had received a detailed daily report of spending, including the number and type of shells that were fired. In the end, he said, any disparities in the expense figures will be marginal.

Perhaps, he proposed, the Finance Ministry did not take into account the entire cost of restoring all facilities and equipment to their pre-war levels, or the cost of rehabilitation and aid to soldiers’ families. He noted that each reserve soldier who is called up costs 500 shekels a day, including actually military outlays. If 60,000 reservists were mobilized, that comes to 30 million shekels a day.

The total defense budget for 2014 — 51 billion shekels net plus revenue-continent expenses — came to 57.7 billion shekels.

In the course of the year the cabinet approved a supplement of 3.75 billion shekels, bringing the total budget to 61.45 billion shekels.

If the expected demand for an additional 10 billion shekels to 11 billion shekels is approved, together with expenses that are conditioned on revenue the 2015 defense budget could reach about 70 billion shekels.