Barak promises defense cuts as part of cost of living deal

“It is preferable to safeguard the budgetary framework, but whoever thinks that framework is holy doesn’t understand the modern economy.”

By NADAV SHEMER
August 17, 2011 04:16
2 minute read.
Defense Minister Ehud Barak

Ehud Barak 311. (photo credit: Ariel Tarmoni/Defense Ministry)

Defense Minister Ehud Barak said Tuesday that he is prepared for cuts to be made to the defense budget as part of a government package to ease financial pressure on Israelis.

Speaking at a press conference hosted by the Manufacturers Association in Tel Aviv, Barak said: “The defense budget will – as much as it pains us – be cut within the framework of a package deal that deals directly with the challenges facing the government.

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“It is preferable to safeguard the budgetary framework, but whoever thinks that framework is holy doesn’t understand the modern economy,” he said, adding that the government-appointed Trajtenberg Committee must be given the mandate to come up with its own solutions to the high cost of living.

Manufacturers Association President Shraga Brosh said he has presented the government a plan outlining NIS 11 billion in investments that it must make if it is to solve the financial problems of the middle class. Brosh said funding of the program should not come at the expense of the defense budget, but rather from an increase in direct taxes on high-income earners and companies, and from a 0.5 percent increase in the budget deficit.

“The solution does not need to come from the defense establishment’s budget, because the [security] threats today are far greater than they were a year ago. I don’t see it becoming a major tragedy if a government which approved a 3% deficit in 2011 and a 2% deficit in 2012 now approves a 2.5% deficit. This will contribute NIS 7 billion to funding the program.”

Brosh was full of praise for the Defense Ministry, and Barak and Defense Ministry Director General Udi Shani were just as complimentary of industry.

“The Defense Ministry has been thinking about industry since I was an infant,” Shani said. “The defense establishment and I are certain that our ‘blue and white’ industry is an important characteristic of the Israeli economy’s strength.”

Shani said the ministry works with thousands of suppliers around the country, while Brosh added that 300 factories work with the defense establishment, strengthening periphery towns like Kiryat Gat.

Shani presented a set of changes his ministry has already approved, including faster payment of suppliers, easier access to information on ministry tenders and measures that will enable smaller suppliers to gain a piece of the pie.

Sitting alongside the others, Industry, Trade and Labor Minister Shalom Simhon said now was a defining moment in Israel’s history.

“The defense minister and I understand the responsibility and the critical stage in which the State of Israel finds itself, and the desire of the younger generation to change the reality. We must understand that what was the case yesterday will not be the case tomorrow.”

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