Taking Stock / Look Who's Talking

Look at our new champion of social rights.

Defense Minister Shaul Mofaz announced on Sunday that he would be the keynote speaker at a conference being organized by the Likud faction of the Histadrut labor federation to protest the 2005 budget.

For him, politically speaking, the idea of spearheading the battle against the budget makes sense. Butting the budget is a great way to gain popularity. It helps position Mofaz as an alternative to Benjamin Netanyahu as a future prime minister.

Economically speaking, the idea of a defense minister and former chief of staff bearing the social conscience flag is preposterous. It is roughly as outlandish as Omri Sharon championing the cause of probity in government.

Mofaz is the top of the most corrupt, elephantine, flab-laden and profligate public system of the lot - the defense establishment. Forgive us, any of you who can't stand seeing such criticism spattering the only sacred cow Israel has left, but the figures scream to high heaven.

If the Israeli economy hadn't been managed by ex-generals and civilians who are struck dumb every time the generals growl at them, tax in Israel would be lower. The national debt would be smaller. Economic growth would be higher and poverty would be far less widespread.

The military feebly excuses its concealment of the true figures by claiming "national security." But even the figures in the public domain are enough for any economist to realize that the biggest threat Israel faces isn't its neighbors, it's the defense establishment.

l The defense establishment is hugely overstaffed, laden with perfectly frank hidden unemployment and with corrupt organizational culture.

l As a percentage of the defense budget, wage and pension payments have been rising for years. Most of the outlay isn't on fighters but on people behind desks. Only 11 percent of the budget is for warriors.

l Civilians working for the military, such as psychologists, doctors and economists, earn tens of percent more than their colleagues in the civilian sphere. If you factor in pension arrangements, you can reach figures two or three times the market prices outside the army.

l The pension outlay on noncoms and officers who retire early can reach hundreds of thousands of dollars, figures that only the richest in the uppermost percentiles of the civilian population achieve.

l The true, terrifying cost of the defense establishment is not evident in the government budgets, because pensions in the army are noncontributory - they set aside nothing - and no provisions are made.

The actuarial liability for defense pensions is one of the most frightening indications of what awaits taxpayers in the years to come. In the last five years, some of the threats Israel faces may have collapsed but the actuarial liability grew from NIS 30 billion to NIS 100 billion.

l Salaries at the Defense Ministry beautifully demonstrate the bubble in which the defense establishment operates. The wages director at the treasury reports that Defense Ministry officials make the most of any ministry staff, with salary costs of NIS 50,000 to NIS 80,000 a month.

Mofaz has the gall to stand on a dais trumpeting about social benefits and he can do so only because the true economic behavior of the defense establishment he heads is hidden. Defense is the only ministry that behaves like a discrete economic entity and even the Finance Ministry has terrific difficulty elucidating the real figures about the army's budgetary practices.

The treasury's budget director, Kobi Haber, used to be in charge of the defense budget. If he opens his mouth and shares the real numbers with the public, then everybody will know just which group is the most detached of all from the social situation in Israel.