Security cabinet readies IDF cuts ahead of vote

Overall 2013-2014 spending plan proposed by Finance Minister Yair Lapid is slated to go to a cabinet vote today.

By LAHAV HARKOV, NIV ELIS, GIL STERN STERN HOFFMAN
MK Danny Danon 311 (photo credit: Courtesy: Knesset)
MK Danny Danon 311
(photo credit: Courtesy: Knesset)
With a vote in the full cabinet expected Monday on Finance Minister Yair Lapid’s budget proposal for 2013- 2014, the security cabinet met throughout the day Sunday and into the night to parse out NIS 4 billion in proposed cuts to defense spending.
Though most ministers are expected to vote in favor of the budget, Environmental Protection Minister Amir Peretz has protested its effects on the poor and Tourism Minister Uzi Landau said he would vote against it over plans to cancel the VAT exemption for foreign tourists.
Deputy Defense Minister Danny Danon said the ultimate decision on the defense budget rested with Prime Minister Binyamin Netanyahu, and said the main question was over how many years the cuts would be spread out. He worried, however, about financial repercussions for workers in the defense industry.
“I am concerned that defense industry workers will be sacrificed, because it is much easier to cut from acquisitions than from the IDF itself,” Danon told The Jerusalem Post on Sun- day night. “The defense [representative] offices abroad cost a small amount. That is not where the big cuts will come from.”
Even if it passes on Monday, Danon said, Lapid’s budget will go through many changes before it is given final approval in the Knesset.
Economy and Trade Minister Naftali Bennett said that despite the ongoing threats to Israel, the Defense Ministry needed to share in the fiscal cuts.
“Nobody thinks there isn’t fat to cut from the Defense Ministry,” Bennett said at a Knesset Finance Committee Meeting in the morning. “I know the threats against Israel are real threats, but for 65 years Israel has been under threat – first it was [Egyptian president Gamal Abdel] Nasser, then Saddam Hus- sein, then [Hezbollah chief Has- san] Nasrallah,” he said.
Lapid’s predecessor at the Trea- sury, International Affairs Minister Yuval Steinitz, echoed Bennett’s sentiment.
“Not only is there room to make cuts from the security budget, but in fact there’s no choice,” Steinitz said in an Army Radio interview. “Syria, Israel’s strongest traditional military rival in the Middle East, is going through a very difficult time, and is less of a threat than in the past.”
Knesset Foreign Affairs and Defense Subcommittee for Human Resources and Training chairman Omer Bar-Lev (Labor) called for Lapid to cut the defense budget.
“Our power is the man in the tank and not just the tank.
Therefore, I suggest that the finance minister, prime minister and defense minister help the man in the tank win and cut the defense budget,” Bar-Lev said on Sunday. “Not in a reckless and drastic way, and without harm- ing the IDF’s ‘long arm,’ which is important in facing the Iranian threat, but other things, and not just the fat, can be cut.”
He said a strong society was just as important as national security and the home front’s strength was worth an additional armored division.
“A strong society is one with equal education for all, good health services in the periphery as in the Center, and where citi- zens can enjoy reasonable hous- ing without needing to invest most of their income in it for most of their lives,” Bar-Lev said.
MK Eitan Cabel (Labor), also on the Knesset Foreign Affairs and Defense subcommittee, said cuts to the defense budget were one of the few things for which Lapid could be congratulated.
“Now, the prime minister comes and says he’ll back Lapid in all of his actions against the middle class and weaker popula- tions, but will reexamine the defense budget cuts,” Cabel wrote on his Facebook profile.
According to the lawmaker, canceling the defense cuts would “add to the great harm to all of us.” He called on Netanyahu to allow the cuts to stand.
Yesh Atid faction chairman Ofer Shelah pointed out on Fri- day that if the NIS 4b. defense budget reduction was not authorized, “the missing money will have to come from somewhere else,” and the Finance Ministry will have to cut “where it can, not where it needs to be done.”
Shelah wrote on Facebook, however, that if the Defense Ministry made cuts in manpow- er, pensions and projects that did not fit with real security needs, then the Finance Ministry would be able to put money back in places that were cut by 2015.
“In my opinion, this is the fair way to look at the budget,” he wrote, “not through populist yelling that the Finance Ministry can’t harm citizens, but by trying to decrease the harm to some areas at the expense of others, and taking the necessary steps so the market and citizens will be in a better situation.”
Moving beyond security spending, Bennett came out in defense of the tax increases and welfare cuts in Lapid’s budget, saying that although it did not address the primary problems of the economy, it was the first step in a series of planned reforms.
“I know we didn’t touch the ports, the public sector – and there are still places to make the private sector more efficient – or the [Israel] Electric Corporation.
But in 45 days you can’t solve the problems of 65 years,” he said.
The government, Bennett con- tinued, was already working toward increasing credit to small- and medium-sized businesses, rethinking cuts to the Chief Scientist’s Office in the Economy and Trade Ministry, and cutting red tape for businesses.
But opposition leader Shelly Yacimovich of Labor said the Treasury’s budget plan hit the poor the most and the rich the least.
According to her figures, after factoring in tax changes, price increases, National Insurance Institute child allotments and so forth, the bottom 10 percent of Israelis would lose a whopping 25.1% of their income while the richest decile would only lose 2.2%. The majority of the changes stemmed from proposed reductions in child allotments.
“A picture arises of a heavy bur- den from difficult, regressive, non-egalitarian cuts that clearly hurt the poor and middle classes, primarily, and hardly touch the rich,” Yacimovich said.
In an interview with Army Radio, however, Israel Tax Authority director Moshe Asher said that not only did the rich already constitute the majority of Israel’s tax base, but the new taxes hit them the most.
“The highest deciles pay the majority of the taxes. From the eighth decile up, they pay the critical mass of the nation’s taxes, so the minute the direct taxes go up, they pay more,” he said.
He also said that the Tax Authority was stepping up efforts to extract more of the approxi- mately NIS 50b. in “black capi- tal” – under-the-table income that should be taxed – and rev- enue from big corporations, whose interpretation of the tax laws led to massive deductions.
“We’ve set a goal of dealing with the big companies with greater transparency,” Asher said.
“There are expert opinions that undermine the tax base at levels the legislature did not intend.”
Steinitz had an altogether dif- ferent take on the source of the nation’s budgetary woes. “The budget hole worsened following the government’s response to some of the demands of the social protests two years ago,” he said. “In the wake of the protests, Israel decided to give a lot more to families with young children, such as after-school programs and free education from the age of three.
“There is no free lunch. When you give more services, you have to fund it,” he said.
The draft 2013-2014 budget was “on the right track,” Steinitz continued, promising to give it his full support. • BATTLE Continued from Page 1 for its ground forces, and com- manders in the field have been instructed to assume that war could break out on their watch.
One example of the more intense training could be found in February on the Golan Heights, where tanks from the 401st Armored Brigade held a war drill just days after soldiers from the Nahal infantry brigade were suddenly mobilized to the Golan, to simulate the outbreak of a conflict.
A large enough budget cut would see such preparations cut back.
Areas that are not expected to be affected included continuous security patrols, and intelligence and surveillance activities.