Israel Wants to Cut Length of Army Service, Reduce Pensions to Lower Budget

The state spends more on the military than any other Western country, Finance Ministry notes, but army is worried it won't be able to keep quality recruits

Yaniv Kubovich
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Israeli soldiers during an exercise, May 2019.
Israeli soldiers during an exercise, May 2019.Credit: Eliyahu Hershkovitz
Yaniv Kubovich

The army is facing demands by the Finance Ministry that would put constraints on its spending plans. The ministry is urging the military to cut compulsory service to two years and curb or eliminate the so-called bridge pensions that retiring career soldiers receive until their old-age pensions kick in. The treasury is also opposed to supplemental funding for the army's efforts to prevent Iran's entrenchment in Syria.

Ministry officials said the next budget will be challenging, arguing that high military spending could drag down economic growth while not being justified for the country's security situation. The ministry staff also noted that military spending accounts for a larger share of the budget in Israel than in any other Western country, while spending on education, health and social welfare needs accounts for a much smaller percentage than elsewhere in the West.

Israel Defense Forces Chief of Staff Aviv Kochavi asked the Finance Ministry to shorten the span of a multiyear spending budget that was approved in 2015 by his predecessor, Gadi Eisenkot, to run through 2020. Kochavi wants it to expire at the end of this year and adjust the budget going forward according to his operational vision. The ministry accepted the request but said that Kochavi would still have to carry out budget cuts, and noted that reverting to an annual budget would make it difficult for the army to engage in long-term planning. Ministry staff also said that the 2019 budget has already been approved and can't be changed, and that Eisenkot’s multiyear budget plan has resulted in $7.5 billion in savings.

The ministry and the army are also awaiting the outcome of the September 17 election, which will determine the prime minister and finance minister. But Finance Ministry representatives have already met with senior members of the IDF and have presented demands on spending that Kochavi had opposed in the past.

Israeli army Chief of Staff Aviv Kochavi
Israeli army Chief of Staff Aviv KochaviCredit: Moti Milrod

The army is worried that the election will postpone the spending plan until the approval of the 2020 budget. Another concern is the appointment of a defense minister who did not participate in the planning process, which could delay the plan's implementation. Furthermore, many aspects of the military budget depend on who the prime minister and defense minister are.

Prime Minister Benjamin Netanyahu, who became the defense minister after Avigdor Lieberman resigned last November, said earlier in the year that he intends to boost defense spending to upgrade the IDF’s offensive and cyber-related capabilities. At the same time, the prime minister has said he expects the army to propose spending cuts of 1.5 billion shekels ($410 million) per year for four years.

Limiting compulsory military service for both men and women to two years is one of the Finance Ministry’s primary demands. Since 2015, as part of Eisenkot’s multiyear spending plan, compulsory service for men was already cut to two years and eight months. Next year, the security cabinet is due to reduce it to two years and four months. Now the Finance Ministry is seeking to implement the long-standing recommendations of an advisory panel which found that compulsory service could be reduced to two years without impairing the army’s preparedness for war.

According to the ministry's calculations, cutting compulsory service to two years would save between 10 billion and 12 billion shekels a year.

The Finance Ministry has proposed that soldiers in positions involving special skills can sign up for an addition four-month period as career soldiers. The plan would not include special units such as the elite Sayeret Matkal commando unit, the Oketz canine unit or the 669 search and rescue unit, whose members sign on in advance for extended military service, receive higher salaries and do course work as part of their military service.

One Finance Ministry source involved in the matter recently said that the number of draftees was expected to increase by at least 17,000 in the coming years, but “Even today, [the army] doesn’t know how it will provide them with meaningful service.”

The IDF adamantly objects to cutting the service period – even to two years and four months as is planned. It opposes shorter military service over concerns that it would damage the model of a people’s army, the source said, “but these are approaches that are suitable for the past. It’s not appropriate for a young population that is not prepared to do three years of insignificant service.”

Readiness for war

Another contentious issue is funding for military campaigns between wars, such as activity in Syria and elsewhere designed to prevent weapons transfers to Lebanon or Iranian entrenchment in Syria. Army officials say such actions require large quantities of advanced munitions, additional flight hours and expanded aerial defense.

The cost of these operations has been close to a billion shekels since 2015 and the army says it will be difficult to cover these expenses. Military officials believe the between-the-wars campaign should be viewed as one extended war. These costs were not been taken into account in Eisenkot’s multiyear budget plan, and the army is seeking compensation from the Finance Ministry for the expenditures, as the government does following a war or large-scale operation.

However, the ministry views it as ongoing activity similar to operations on the border of the Gaza Strip or in the West Bank and claims that the IDF needs to prioritize its goals within the existing budget. Ministry officials also say that the army receives funding to prepare for war and there is no need to provide supplemental funding for operations that prevent a war. According to the ministry, the cost of these operations is far lower than past operations and wars, such as the Second Lebanon War in 2006, which cost about $11 billion.

Construction works on the Gaza border barrier, January 2019.
Construction works on the Gaza border barrier, January 2019.Credit: Eliyahu Hershkovitz

Another dispute involves funding for the barrier being constructed along the Gaza border. IDF representatives claim that the Finance Ministry has failed to pay about a billion shekels for the project in recent years, which instead came out of the defense budget.

And then there’s the issue of the bridge pensions for retiring career soldiers, which are funded from the Defense Ministry’s budget. Senior Finance Ministry officials are demanding that the bridge pensions be eliminated or at least substantially reduced while developing programs to encourage career army service at the same time. As a deputy army chief of staff, Kochavi participated in discussions on bridge pensions with the Finance Ministry and worked to head off limiting them. Top army brass confirm that the subject has been under consideration recently.

Officials in the army worry that the Finance Ministry's demands will make it difficult to recruit quality personnel. One senior defense source noted that in TheMarker's ranking of the best places to work in Israel, the Israel Police surpassed the IDF.

“Being in the army is contrary to the young generation’s DNA,” the source said. “A company commander who does 30 days in [the Gaza border area] subject to high operational tension, who doesn’t see the wife and kids and sleeps in a bunk bed, wants to be compensated like any civilian in the private sector for such sacrifice. It’s hard for him to understand why he needs to stay in the army, doing work that’s so hard, when at the end of the month he gets a 10,000-shekel paycheck.”

Army sources speak of increasing difficulty convincing young career soldiers to commit to additional stints, which results in civilians filling some of those jobs. “The significance of the position, the mission and its importance to the country’s security is being increasingly eroded and is no longer enough to motivate the best to stay,” one military source said. “The fact is that the best people, the highest quality people and the most committed to the organization today are in the IDF today is a miracle, but you can’t rely only on miracles.”

Finance Ministry officials are aware of the difficulty in keeping quality young recruits in career army service. They say career soldiers are trapped economically until they turn 42, at which point economic opportunities open up for them in the army, but these opportunities are not relevant to them at the beginning of their career army service.

They instead suggest financial grants for career soldiers doing their first and second stints. “Young people today are looking for a professional challenge and to make money that would enable them to compensate for the hard work and create a family," one treasury official said. "The army may be the place that provides the most significant professional challenge in the entire economy. Now it needs to provide those who serve with fitting compensation during significant stages in life.”

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