The ongoing budget feud raging between the Defense and Finance Ministries over the 2015 budget escalated further on Monday, when a defense official disclosed that the IDF is preparing to significantly scale back vital operations – and stop all training – from June onwards.

From next month, operational air force flights will be scaled back, and all training for Ground Forces, the Israel Navy, and the Israel Air Force will end. Defense acquisitions will be frozen, and all reserve duty will remain canceled, sources warned.

“We’re going down to the lowest level, one of basic existence,” one source warned.

A cash injection of an additional NIS 750 million is needed, just to continue basic functions for this year, including training for conscripted forces, the source said This year so far, the Defense Ministry has stopped developing future weapons and defense platforms as cash has dried up. In 2015, should the budget crisis remain in place, the military will come to a full stop, sources said.

“We won’t be able to start the year. It’s impossible. We’ll have to shut down,” one said.

This is due to the Finance Ministry’s refusal to fund the components of the defense establishment that “create security,” he added.

Other projects under threat include the planned move of the C4I Corps and the intelligence community to southern Israel, and the acquisition of a sixth Dolphin-class submarine, after the Finance Ministry reneged on an agreement that stipulated how the two ministries would divide the costs of the platform.

Defense sources have expressed outrage at the cancellation of signed agreements.

To save costs, the IDF has, over the past 18 months, shut down a fighter jet squadron as well as a Cobra combat helicopter squadron, and fired over 1,000 career soldiers.

The Defense Ministry expected to receive NIS 57.6 billion in 2014, but instead got a NIS 51 billion budget.

With increasing costs, and the ministry having to pay for the rising pensions of retired career soldiers, as well as underwriting rehabilitation programs for soldiers – injured in the course of their service – and their families, security sources said they have reached their wits end on how to pay for it all with the financial limitations they face.

Of this year’s NIS 51 billion budget, sources said the IDF received NIS 26.5 billion. Special, classified projects the government ordered the defense establishment to prepare received NIS 4.5 billion.

Six billion shekels were spent on acquisitions, and another NIS 1.1 billion had to cover VAT charged on acquisitions.

Seven and a half billion shekels were directed to pension funds for retirees, and NIS 3 billion went towards rehabilitating families. Another NIS 1.1 billion were used for paying taxes, and the Defense Ministry received NIS 1.5 billion for its annual activities.

In the past, the government appointed a committee led by former Finance Ministry director David Brodet to examine the defense budget.

It called for a NIS 61.6 billion defense budget for this year – NIS 10 billion more than the budget allocated.

As the crisis escalated, Maj.- Gen. (res.) Dan Harel, director of the Defense Ministry, released a statement on Monday, saying that “The charges that the IDF and Defense Ministry don’t know how to manage their budgets, or that there are huge excesses in the defense establishment, are blind to the facts.” He added, “The charge that security needs are a threat to health, welfare, and education is scandalous and lacks any basis in reality.”

“Every year, [the] defense establishment is underfunded and cannot meet tasks given to it by the government.

‘Completion payments’ [additional cash transfers made after the initial budgeting] are then made, causing uncertainty over time. There has been no multi-year plan for the past four years. The result is failure to exploit resources in the best manner, and damage to the process aimed at strengthening the military, as well as acquisitions and training,” Harel said.

He added that the current crisis is directly harming Israeli defense industries and progress in hi-tech.

“The defense establishment contributes to [the] economy, and is the largest direct and indirect employer in the country. It creates jobs in peripheral regions. Defense industries have fired thousands of employees due to cancellations of acquisitions.

We have frozen all acquisition- and-order contracts that haven’t been signed,” he said.

Orders for new defense systems have been cut in half this year so far. “Israel exists to a large extent due to the IDF’s power,” he warned.

When negotiating with Finance Ministry officials, defense officials said they are prepared to look at cuts to the military, changing the service model, and altering programs for rehabilitation for families, he said. “The relative security quiet [in Israel], in place despite fact that the whole of Middle East is boiling over, is a result of the quality and effective defense establishment.

It does not stem from fact that our enemies have stopped trying to harm Israel,” Harel said.

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