Israel Can Cut Its Defense Budget Without Risking Security

There are several ways the military could trim its budget and reallocate to civil spending, lsuch as extending officers' retirement age; but every time the idea is brought up, defense shoots it down.

Yossi Melman head
Yossi Melman
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Yossi Melman head
Yossi Melman

Someone tried to convince Defense Minister Ehud Barak to acquire Vulcan-Phalanx cannons from the U.S. three years ago, to see how they work and defend Sderot, at least until Rafael Advanced Defense Systems finished developing the Iron Dome anti-missile system.

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Barak was convinced and immediately called Defense Ministry director general Pinhas Buchris, who objected from the start to purchase of the cannon, saying that he didn't have the money. Barak responded that the money could come from temporarily frozen funds earmarked for a navy ship.

In the end, Barak did not order the cannon. But the story illustrates the ease with which Barak can game the defense budget to meet unexpected needs. Barak has recently offered a few suggestions that would appear to demonstrate that the Defense Ministry can also contribute to solving the socioeconomic crisis.

An IDF soldier overlooking the border between Israel and Lebanon.Credit: Yaron Kaminsky

Among other things, he mentioned granting benefits to discharged soldiers and evacuating land occupied by abandoned army bases. The problem is that these suggestions don't really help.

What is termed an "economic evacuation of bases" was already agreed on, in principle, some years back. The idea was that the land would be sold to the Israel Lands Authority, which would then rezone it for housing.

The money received for the land, most of which is urban, would fund relocation of the bases. Since the agreement, nothing has been done, due to bureaucratic roadblocks, namely disagreements between the Defense Ministry and the ILA.

But even if this obstacle were removed, the land would not be available for many years, and will not solve the current housing crisis.

The Defense Ministry budget (called the gross budget and including American aid and proceeds from the sale of army surplus ) stands at about NIS 55 billion, which is divided into three main areas of expenses. NIS 27 billion - 60 percent of the shekel budget (the net budget, which excludes American aid ) - is earmarked for salaries, pensions, rehabilitation of the handicapped and for reserve soldiers. The other two areas are maintenance and development. Each of them contains fat which can be trimmed.

An audit carried out by economist David Brodet a few years ago recommended cutting two percent from the salaries of career soldiers, an expense which amounts to NIS 12 billion. Such a cut could save hundreds of millions of shekels a year. Nothing has been done. Not only has there not been a pay cut, salaries have gone up.

Another suggestion made by the cost-cutting committee headed by former intelligence director Amos Malka was to postpone the retirement age in the defense complex from 45 to 55, but in the end it was decided to set retirement age at 48-50. This law goes into effect only in 2013.

Additional suggestions for increasing efficiency proffered by two committees set up at the behest of the defense ministry and the army have been rejected. The committee headed by Avi Ben Bassat had recommended shortening mandatory service by eight months. The other committee, head by Prof. Avishai Braverman, recommended using reserve soldiers only for training and in case of war, and not in regular operations. These suggestions could save billions of shekels.

In the area of maintenance, the idea was raised that the army cease producing the Merkava tank and transfer the production line to a public or private concern. The cost of the tanks is about a billion shekels a year. This suggestion, too, which could save NIS 200 million a year, is still gathering dust.

There are even ways to trim the fighting force's budget, normally considered beyond discussion, without damaging operational fitness and preparedness. Reserve duty can be shortened. Submarines can be built in Germany with Berlin footing a third of the $500 million cost, according to Der Speigel. Israel's security will not be impaired if the submarines are delivered later.

And there are other long-term plans which could be postponed. They don't need to be shut down. It's enough to delay construction for a year and save some money. Even when it comes to the purchase of F-35 stealth planes, each of which costs $135 million and whose funding comes from American aid - it is possible to find creative cost-cutting methods.

But the Defense Ministry and the army have managed to terrify the public over the last 30 years. They do it during times of quiet, and even more in times of war and crisis. Whenever anyone seeks to cut their budgets they cry bitterly, inflating real or imagined threats against Israel and warning that if even one shekel is removed, Israel's existence will be imperiled.

A handful of officials in the Finance Ministry, a few economists, social activists, commentators and even former army people say it is possible to cut the defense budget without doing harm to Israel's readiness to fight. But most of the time, at the end of the day, government ministers, even if they believe otherwise, give in and don't cut the defense budget. The result is that in 2006 there was an insane increase of 40 percent, from NIS 40 billion to NIS 55 billion.

If the Defense Ministry and Defense Minister Ehud Barak really want to contribute to a change in national priorities, they must agree to cuts in their budget. The problem is that Barak is not willing to do this. Both he and army Chief of Staff Benny Gantz have expressed their opposition to a budget cut, proving that they behave like union leaders instead of those who bear national responsibility.

History shows what happens to countries, even militarily powerful ones, when their societies are sick. The Finance Ministry estimates that an immediate cut of NIS 2 billion will not destroy the State of Israel. It can only be hoped that the Trajtenberg Commission will indeed recommend a change in priorities, and that the government will know enough to force it on the Defense Ministry and the army this time, because Israel is a country with an army, and not vice versa.

The Defense Ministry spokesman's office responded that "the ministry and the army are undergoing a wide-ranging process of reorganization which includes raising the age of retirement, as well as reorganization in the areas of purchasing, maintenance, construction and delegations. It should be noted that the Brodet Commission decided that defense needs over the last decade required NIS 50 billion more than what was actually budgeted. According to finance ministry statistics, the percentage of the national budget and gross national product allotted to security is being significantly reduced, while the budgets of other government offices are rising significantly."



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