Another Record Year for Defense Spending

2008 defense budget to hit NIS 51.3b.

The defense budget for 2008 will be NIS 51.3 billion, thereby setting yet another new record for defense spending.

This figure represents over 16% of the entire NIS 314 billion state budget for next year, which the Knesset approved yesterday by a 64 to 31 vote, after passing the accompanying Economic Arrangements Law the day before.

Defense spending also represents about 7% of gross domestic product. This is much higer than in any of the 30 OECD nations.

Of this sum, NIS 4.3 billion will go for pensions for those who have retired from the military, up from NIS 3.9 billion in 2007. Another NIS 1.2 billion is earmarked for the separation fence, and NIS 1.2 billion for bereaved families, widows and memorials for the fallen.

In total, 40.7% of the defense budget goes for personnel, 23.5% for equipment and 35.8% for operations and miscellaneous costs.

But compared to other militaries around the world, Israel's spending on manpower is low. The Italians spend 85.1% of their defense budget on personnel, Germany 58.5%, France 56.3% and Britain 42.1%.

The base defense budget for 2008 is only NIS 49.35 billion, as was recommended by the Brodet Committee on defense spending and adopted by the cabinet. However, in the last quarter of 2008, the Defense Ministry will also be able to use $150 million of the U.S. military aid for 2009, as well as additional funds from revenues from sales and other income.