IDF, Kahlon Reach Breakthrough on Defense Budget Reforms

Defense officials believe the sides will compromise on a budget of 60 or 61 billion shekels a year for the next five years.

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Finance Minister Moshe Kahlon, September 2, 2015.
Finance Minister Moshe Kahlon, September 2, 2015.Credit: Emil Salman

IDF Chief of Staff Gadi Eisenkot and Finance Minister Moshe Kahlon have achieved a breakthrough in their talks about defense budget reforms on the basis of the Locker committee’s report and the Israel Defense Forces’ multi-year plan, Haaretz has learned.

The IDF, Eisenkot and approved by Defense Minister Moshe Ya’alon, has agreed to unprecedented concessions, defense officials said. Eisenkot is expected to accept most of the Locker committee’s recommendations about increasing transparency of defense spending.

The Locker report, which was submitted to the cabinet in July, recommended that the IDF discharge about 2,000 more standing-army people, lower its pension load and shorten compulsory service for men to two years from two years and eight months. It also suggested canceling the so-called bridge pensions, which are paid to career officers from the day they leave the IDF until the legal retirement age, which is 67.

The IDF and the treasury have also recently reached an agreement on reforming the rehabilitation division, but in this case it is not clear if the defense establishment agrees to fully implement the Goren committee’s recommendations on handicapped veterans’ rights, or only a modified version of them, defense officials said.

It is more likely that the two sides will agree on a modified version, which will make it more difficult to obtain handicapped veteran status, without infringing on the terms of handicapped veterans who have already been recognized as such.

An agreement on these two issues constitutes a breakthrough, as the IDF initially rejected the Locker committee’s recommendations.

Talks are focusing on the retirement plan for career officers. The two sides have moved much closer to an agreement. The army and Finance Ministry are expected to agree to raise the age for non-commissioned officers to 55. At this age they will retire and receive a monthly pension until the legal retirement age of 67. This clause is supposed to help non-commissioned officers, whose wages are much lower than career officers’ salaries and who have more difficulty finding work after retirement.

The army is presenting a retirement plan for career officers based on Eisenkot’s original idea, but with a reduction in the number of career officers reaching retirement age by some 40 percent. This will be achieved by giving officers the option to retire at 35 with no pension, but with a small retirement grant. Officers who will remain employed by the IDF after 35 will retire at the age of 42 or higher with a full pension.

Kahlon is expected to agree to making a number of officers retire at 35 without a pension. As the number of such officers is small, the gap between the positions is a only few hundred people. But the dispute is on the principle of whether all the career officers who reach retirement age receive a pension until they’re 67, or only most of them.

Another disagreement is about the size of the defense budget. The Locker committee recommended ensuring the IDF a multi-year budget of 59 billion shekels. Eisenkot is demanding that in exchange for his unprecedented agreements, this budget is increased to 63 billion shekels.

Defense officials believe the sides will compromise on a budget of 60 or 61 billion shekels a year for the next five years.

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