Israel's Treasury Tries to Allay Budget Cuts Fears, as Defense Ministry Foresees 'Hard Year'

Finance officials suspect Defense Minister Moshe Ya'alon will seek to reopen negotiations about size of defense budget.

Defense Minister Moshe Ya'alon spoke out strongly about cuts to the defense budget Monday, in remarks seen by some Finance Ministry officials as an effort to reopen negotiations on the size of the defense budget this year and next. The budget is due to be presented to the Knesset next week.

The defense establishment is to present its work plan for 2013-2018 to the security cabinet at the end of the month, based on the budget the cabinet has determined for each of those years. The cabinet will then decide whether to approve the plans or request changes.

Last month, the security cabinet unanimously approved the defense establishment's budget for 2013-2018. It was decided that, in exchange for cutting its budget in 2013 and 2014 by NIS 3 billion, the defense budget would grow significantly to an eventual NIS 59 billion in 2018. Speaking to the Knesset Foreign Affairs and Defense Committee, Ya'alon said: "The army needs long-term plans and if there is no multiyear plan, we have a problem."

Ya'alon told the committee, "There is great and immediate significance to the security budget. The situation is one of crisis. To get through 2013-2014, we have to cut reserve days, reduce training and reserve operational activities, and, as a result, burden the regular army.

"We are preparing for a very hard year in 2014. With regard to active defense, so far we are running with Iron Dome [short-range antimissile system]. As for other systems - Magic Wand, for example - we will have to stretch it unless we reach another agreement." Ya'alon was referring to the medium- to long-range missile intercept system now under development (also known as David's Sling ).

"On the subject of pensions, there is no lack of urban legends," Ya'alon said, adding that the defense establishment was in a time of transition - from budgetary to contributory pensions - "and we will have to live with this ... It has to be clear that an engineer in the Israel Defense Forces serves and does not 'work.' An engineer in the IDF is at the beck and call of the system 24 hours a day, without overtime ... Over the past two years, those serving and pensioners have been severely hurt. We have quite a few people serving in the career army that are receiving income supplements. And their pension is not high."

Finance Minister Yair Lapid declined Haaretz's request to respond to Ya'alon's statements.

The Finance Ministry said in response: "The security threats against Israel have not disappeared. They have changed. Not army versus army, the IDF versus Egypt or Syria, but rocket threats, missiles, Iran. We have grown stronger, but on the other hand they have not been sitting quietly. The army works according to multiyear plans. It needs to change its structure; to create other priorities, in keeping with what's happening on the other side; to reduce forces on the one hand, and to increase them on the other, in keeping with the needs.

"That is why there is a five-year budget. That is why the defense establishment has been told to come back and present its plans within 45 days. To show how it is building its multiyear plan, where it is reducing, where it is increasing, and also how it is streamlining.

"The defense establishment is not the only entity managing risks, including to human life. So are other systems, like health, transportation. There is no 100 percent security."

The Finance Ministry added: "There is no reason to panic. Combat training is not being cut ... It is not so terrible - although it is certainly not desirable - if training intended for the second half of 2013 is held in the first half of 2014. That is not the end of the world. The cut is not easy because the defense budget jumped in 2012 and it must be made compatible ... but they will do it. That is their job."

Emil Salman