Israel's Budget Reserves Put at NIS 10.1 Billion

Knesset study says figures include money kept secretly.

Olivier Fitoussi

The government has about 10.1 billion shekels ($2.7 billion) in reserves in the 2014 budget, some of the money revealed in publicly available documents and some it kept secret, a report by the Knesset Research and Information Center revealed on Tuesday.

The report, which was prepared by Eliezer Schwartz at the request of MK Menachem Eliezer Moses (United Torah Judaism), estimates the secret reserves at 1.8 billion shekels of the total. This sum is not designated as reserves in the budget, but has been allocated on what Schwartz termed a “systematic basis” to various other parts of the budget.

“One of the categories regarded as a secret reserve is Section 13, ‘other expenses,’ which is spent at the discretion of the treasury and is used to fund activities not necessarily included in the budget,” the report said.

The report comes at a sensitive time, as the Defense Ministry has been seeking big spending increases to cover the cost of Operation Protective Edge and reequipping the Israel Defense Forces for future strategic threats in the coming years. In August, the cabinet approved a 2 billion-shekel cut in civilian ministry budgets and gave most of the savings over to the army.

“The report’s conclusions are outrageous and incomprehensible,” said Moses. “Only recently the government decided to cut 2 billion shekels in spending for the most important civilian ministries – Education, Welfare and Health … In fact, it’s clear now that there is money and that the treasury has been fooling us.”

The Finance Ministry declined to comment on the specifics of the report.

As of August, total reserves had reached 8.3 billion shekels, of which 4.6 billion shekels was designated for unplanned cost increases and other fiscal goals. Since then, the government has reduced the figure by 2 billion shekels and an effort by Schwartz to get clarifications from the Finance Ministry as to reserves policy for the rest of the year was unanswered.

This year’s reserves are relatively small compared with recent years. In 2013, they amounted to 21 billion shekels, of which 86%, or 18 billion shekels, was eventually allocated. The year before that, the reserves reached 18.5 billion shekels, of which all but 1.9 billion shekels was eventually spent; and in 2011 they were 15.8 billion shekels, of which 1.4 billion shekels was left unallocated by the year’s end.