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Steinitz sets stage for Defense budget cuts
By NIV ELIS
24/02/2013
The Finance Ministry now has direct computer connections to the Defense Ministry; before it had "no clue how money was spent," Minister says.
 
Finance Minister Yuval Steinitz took a victory lap around Defense Minister Ehud Barak for successfully reining in what he called the “black hole” of defense spending, setting up an argument for continued cuts in the process.

Speaking to Defense News’s Barbara Opall-Rome in an interview to be published on Monday, Steinitz said, “The first time I raised this issue in the cabinet, Barak said, ‘Over my dead body.

This will never happen.’ He accused the Treasury of trying to control and dictate to the Defense Ministry. It took me two-and-ahalf years of hard struggle vis-àvis Barak, two Israel Defense Forces chiefs of staff and a very strong lobby.”

The government’s legal requirement to trim an estimated NIS 13 billion from the 2013 budget has the Defense Ministry on edge, as numerous experts point to its programs for ways to trim the fat.

Steinitz has mentioned cutting NIS 3b. from defense, while more recent rumors put the figure at NIS 4.5b. over two years.

In the interview, Steinitz said that defense spending had lacked transparency and accountability.

“Up until last year, the finance minister, relevant Knesset leaders and even the prime minister didn’t have a clue about how money was spent,” he said. “The tax authorities didn’t even know how much to deduct from salaries because we had no access to their books.”

Now, however, the Finance Ministry has direct computer connections to the Defense Ministry.

“We see all contracts, tenders, progress payments and salary expenditures. Now, we see exactly where the money is going, what is the tempo of spending and whether they are running into trouble,” he said.

The issue of defense spending remains a controversial one in the government. Last year, at a time when the budget was being slashed to reduce the deficit, Barak persuaded Prime Minister Binyamin Netanyahu to carve out a NIS 2b. exception for defense spending. That, Steinitz says, came with strings attached: opening up to transparency. It also meant giving the Finance Ministry authority to submit the ministry’s budget book.

During the standoff, Barak argued that Finance Ministry oversight would compromise security.

“I’m responsible for the security of Israel’s citizens, and I am not prepared to fail. If we give the Treasury the right to veto our decisions, it will directly influence our security,” Barak explained at the time.
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