* Finance Ministry seeks cuts to defence budget
* Army calls off drills, public unimpressed
By Maayan Lubell and Steven Scheer
JERUSALEM, June 1 Israel's Defence Ministry has
for weeks been engaged in a public battle with the Finance
Ministry, which is seeking to slash Israel's largest budget and
dismisses warnings that cuts will make it harder to protect the
The Treasury is seeking an $870 million cut in defence
funds, which at about $14.5 billion make up some 17 percent of
Israel's total budget. The Defence Ministry in turn has
cautioned it will Israel's security will be compromised unless
its funding is increased.
The row has pitted defence and finance officials against
each other, making mutual threats in the media. Some see it as a
sign of change in Israel's attitude toward its military, once
the nation's sacred cow.
As the debate continued, defence sources said on Sunday the
air force had halted many training flights over budgetary
constraints - a move that some commentators dismissed as a scare
"After several years of false alarms, the defence apparatus
is now finding it hard to persuade the government that this time
the wolf has really come to prey on the herd," wrote Amos Harel,
Haaretz newspaper's defence analyst.
"The citizenry is not impressed by the generals' threats."
Back in the 1970s, Israel's defence budget represented about
30 percent of GDP. In a growing Israeli economy, it now stands
at some seven percent, a figure still far higher than in Western
Israel's Finance Minister Yair Lapid has vowed not to cater
to Defence Ministry demands. "The equation is simple: any
addition will come at the expense of the public," he said.
Lapid's Yesh Atid party was carried to second place in the
2013 election on the wings of middle class uproar over high
living costs. The vote was seen as a shift in national concerns,
from matters of war and peace to bread and butter issues.
"There is now an idea that security does not only mean
defence budget. People understand that education and health and
social services are security as well," said Yesh Atid lawmaker
Ofer Shelah, who is a member of both the Finance and Foreign
Affairs and Defence committees in the Knesset.
"It is a growing debate that was once considered
sacrilegious in Israel," Shelah said.
In May, Defence Minister Moshe Yaalon, citing funding
issues, called off a major homefront military drill.
"Delaying the drill is the first step on the way to an
almost complete halt of military and defence training because of
budget constraints. This is not a game and we are not instilling
fear," a senior defence official said in the announcement.
But Yaacov Lifshitz, of the Begin-Sadat Center for Strategic
Studies, believes the Defence Ministry should be more
responsible with its financial resources and questioned whether
the public would accept such an argument.
"On the face of it this announcement is creating some
antagonism. We are talking about a budget of 60 billion Shekels
($17.3 billion) ... what's to stop the air force from
The $14.5 billion defence budget is a base figure
supplemented by additional revenues and additional government
funding approved during the year. Another $3 billion in aid
comes from the United States.
And Finance Ministry officials say cuts can be made
elsewhere, especially to generous pensions paid to officers who
often retire in their 40's and then embark on a second career.
A government panel, appointed in 2007, drew up a 10-year
defence budget, but the plan was only partly implemented. Prime
Minister Benjamin Netanyahu has appointed a new committee but it
has not yet begun working and it is doubtful any findings can be
delivered in time for the 2015 budget.
Maharan Frozenfar, who served as the financial adviser to
the army's chief of staff and Defence Ministry until 2011, said
an imperfect multi-year plan would still be better than
quarterly quarrels between the defence and finance ministries.
"Instead of looking to the long term and saying we want
defence spending to be like in other Western countries, and
setting a multi-year plan steadily over time, what do we do? We
haggle and arm wrestle," he said.
Netanyahu issued a statement on Wednesday in which he urged
both sides to stop bickering and hold "a substantive discussion"
until he makes his decision in the coming weeks.
In past years the finance ministry has succeeded in cutting
the defence budget, defence officials have tended to request
more funds after the budget was approved. Following a public
debate, the prime minister usually approved the increases.
Last December, Israel's parliamentary finance committee
approved 3.27 billion shekels of additional funding for defence,
on top of a 2.75 billion shekel boost approved two months
($1 = 3.4724 Israeli Shekels)
(Writing by Maayan Lubell; Editing by Jeffrey Heller and Raissa