Last summer, Prime Minister Benjamin Netanyahu took Israel’s security cabinet by surprise when he unveiled his Security Concept 2030 program. The plan called for raising the defense budget by 0.2 or 0.3 percent to a fixed 6% of gross domestic product.
In shekel terms that would spell an increase of 4 billion ($1.1 billion) annually in defense spending.
As for the other parties, their stated defense policies consist mostly of declarations about standing strong against our enemies while striving for peace. Some of them have adopted positions on the wrenching debate over drafting ultra-Orthodox Jews, but no one takes a position on defense spending.
Even Kahol Lavan, the party led by three ex-military chiefs of staff, fails to specify what it thinks is the proper cost of defending the country. The Israel Defense Forces’ budget is a sacred cow that the public doesn’t want to touch.
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This is not the place to weigh in on whether Israel needs another submarine or five more fighter jets. However, when you are speaking about the biggest single item in the state budget – 70 billion shekels every year – the government should have a stated spending policy.
Changing threat, same budget
That number suggested Israel was teaching Hamas a painful lesson on breaking the rules of engagement by launching rockets at Tel Aviv. In practice an attack like that would require at most two squadrons, or 40 jets, but it could also have been done with as few as 10 planes, depending on which ones were deployed.
The threat from Gaza is not the reason the Israel Air Force has hundreds of fighter jets. Neither is Hezbollah or the remains of Bashar Assad’s Syrian army. Yet Israel over the last five years has bought no fewer than 50 advanced F-35 aircraft at a cost of $5.7 billion and is now considering whether to buy 25 more.
The cabinet deliberations over why Israel is buying the jets are classified, but it is safe to assume that the underlying assumption is that the country needs to be ready for a conflict like the 1948 war, when Israel was attacked by seven countries simultaneously.
But the defense budget should be aligned with the challenges Israel faces today. It can’t be that the Arab Spring and the near collapse of Assad’s government in Syria hasn’t led to a reduction in Israel’s defense spending. There should be some correlation between what we spend on the military and what our neighbors do.
Maximum defense, minimum outlay
According to World Bank figures, Israel ranks seventh among countries in the world for defense spending as a percentage of GDP – 4.73% in 2017. Only Oman, Saudi Arabia, Congo, Kuwait, Algeria and Jordan rank higher.
It’s no coincidence that none of these countries are world leaders in social and economic development. The more you spend on arms, the less there is for civilian uses. Fewer resources are available for boosting productivity and welfare, which weighs on long-term economic growth.
Israeli military power is a critical factor in enabling the economy to function and thrive. But it doesn’t follow that each extra shekel put into arms gives the economy a shekel’s worth of boost. There’s an optimal budget that gives the most bang for the buck – and after that defense spending takes a toll on the economy.
The defense establishment isn’t a business than can quantify its output. It comes closer to being like an insurance company protecting its clients against risks. As consumers our goal is to get the best possible policy from the IDF, which includes the goal of paying the lowest realistic premium.
To achieve that we are right to expect our insurance company to operate efficiently. We shouldn’t assume that the army’s budget as a share of the economy will always grow; quite the opposite.
A price tag for all
Between 2004 and 2017, the number of days for reserve duty dropped 84%. The number of reserve soldiers was reduced by 100,000 when Gadi Eisenkot was chief of staff. The main reason for this is that the army was required at the time to pay for reserve duty out of its own budget – as good an example as any about how, when the army is forced to pick up costs, it finds ways to reduce them.
Service for draftees should be put to the same test. When the army has to pay soldiers the minimum wage, it will re-examine the costs and no doubt find that it can use fewer recruits or reduce the time they serve, thereby freeing more young people to start their higher education and work life earlier, to the benefit of the economy.
A reasonable minimum wage would also go a long way towards addressing the issue of equal military burden. It will motivate more Haredim and Israeli Arabs to enlist. It will help professionalize the army and encourage more soldiers to enlist in units that require lengthier training and courses.
There’s no reason why a shorter minimum service period will undermine the IDF’s role as a social melting pot – even one year is enough for that.
Budget deliberations in the security cabinet examine purchasing planes and count each as separate items, not as part of an all-inclusive examination of total defense needs and spending priorities. Instead, they should be examined as a zero-sum game where the purchase of each new tank comes at the expense of a new missile or submarine.
Defense spending for defense
Finally, the army should be spending money on defending Israel’s borders and not on activities unconnected with that.
The Defense Ministry, for instance, doesn’t need to operate a radio station. It’s not the U.S. Army in World War II ensuring that soldiers in Europe and the Pacific had news and entertainment in their own language. It doesn’t need to be engaged in education through pre-army boarding schools. We should be examining whether the army needs to still be manufacturing tank components.
More than that, we should be asking why an army physiotherapist is entitled to a pension at age 42 at a cost of 3.5 million shekels because they are deemed to be providing support services to troops in the field. The same generous pay and pensions also go to the army’s legal establishment.