Israeli Finance Minister Must Publicize Pension Deal With Defense Ministry

The secrecy surrounding the defense budget agreement, which clearly does not stem from security reasons, raises concerns about negligent wording and unfounded concessions.

Finance Minister Moshe Kahlon and Defense Minister Moshe Ya'alon shaking hands, November 18, 2015.
Olivier Fitoussi

The Defense Ministry and the treasury signed an agreement last November that determines the defense budget framework for the next five years, while also ostensibly resolving some of the toughest disputes relating to that budget: New pension arrangements for career soldiers; demands for efficiency measures; the budget for the Rehabilitation Branch; and, most importantly, making the defense budget more transparent to both the treasury and the public.

But from the date the agreement was signed, it has been the very model of the exact opposite of transparency. The treasurys promise that within days it would publish the agreement, a civilian budgetary document, so that the public could review it, has yet to be fulfilled.

An even greater absurdity is that even the Knesset members responsible for approving the defense budget – which is why they were given the highest possible security clearance – havent seen the agreement, either. Nor is it known when they will see the detailed agreement, if ever.

The secrecy surrounding the defense budget agreement, which clearly does not stem from security reasons, raises concerns about negligent wording and unfounded concessions – wording and concessions that both parties to the agreement, the treasury and the Defense Ministry, would prefer to hide from the public.

Take, for example, the ridiculous argument over one reported clause: Whether career officers have the right to continue to receive a retirement bonus equivalent to 12 salaries – which works out at 250,000 to 300,000 shekels (some $63,700 to $76,500) for each serviceman. This is at the same time as these same servicemen get a bridge pension from the state for up to 24 years (from when they leave the army until they reach legal retirement age), as well as a budgetary pension scheme that is the best in the economy.

The Finance Ministry and the Prime Ministers Office are convinced that the career officers pension arrangement is the best in the country as is. They believe that adding another 300,000 shekels as a gift to every retiree sweetens the pot to unreasonable levels. This is most assuredly not equality, nor is there any economic justification for it. But despite this, the defense budget agreement leaves the issue unresolved.

If thats what one alleged clause in the agreement looks like, one can justifiably wonder what the rest of the agreement says. Is the treasurys capitulation to the Defense Ministry what officials are trying to hide from the public?

Finance Minister Moshe Kahlon, who portrays himself as socially conscious, must publicize the pension agreement, which is liable to be a burden on the entire state budget for the next several decades.