Expanded army operations to affect 2007 budget

Finance Minister Avraham Hirchson said estimates in the Defense Ministry placed the costs at about NIS 7 billion so far.

hirchson 298.88 (photo credit: Ariel Jerozolimski [file])
hirchson 298.88
(photo credit: Ariel Jerozolimski [file])
As the cabinet voted to further expand the military operation in Lebanon, political officials began to express concern over the price the war would extract from the 2007 state budget. While the impact of the campaign is still unclear given that its duration is unknown, Finance Minister Avraham Hirchson said Wednesday night that estimates in the Defense Ministry placed the costs at about NIS 7 billion so far. According to Finance Ministry Director-General Joseph Bachar, the army's operations in Lebanon have shifted budgetary priorities from social welfare funding to defense spending. "In terms of how we [the Finance Ministry] work vis-a-vis the Defense Ministry, it's a whole different ball game," he told The Jerusalem Post during a tour he made to the North on Wednesday with officials from the Prime Minister's Office and the Home Command. "It will be much more difficult to allocate money for social welfare issues." Hirchson announced Wednesday night that NIS 2.2b. would be transferred from various sections of the 2006 budget to fund the fighting in the North, pending cabinet approval expected Sunday. While NIS 1b. would be taken from different agreements and projects budgeted for 2006 but only scheduled to be used in 2007, NIS 1.2b. would be taken as a direct cut from this year's government ministry budgets. The Health Ministry, Welfare Ministry and local authorities would be spared cuts to their budgets, but the Education Ministry would be among those losing some of their funding for the rest of the year, Hirchson said. Beyond the NIS 2.2b. to be made available as soon as the measure receives cabinet approval, another NIS 600 million within the ministries' 2006 budgets would be earmarked as a reserve for possible future use to fund expenses of the fighting "in the event that they will be needed," said Budget Supervisor Kobi Haber. One-third of the NIS 600m. would be taken from other parts of the Defense Ministry's budget itself, whether in the initial reallocation or as part of the reserve. Finance Ministry officials also said they would need to take a second look at the allocations for the 2007 budget, causing many of Israel's political officials to worry about what that would mean for their campaign promises of a socioeconomic agenda. "We made certain promises during the elections and, although nobody could have foreseen the war, we also can't forget those promises," said MK Avishay Braverman (Labor). Labor's campaign of a "socioeconomic revolution" was followed by a coalition agreement that saw a hike in the minimum wage as well as several other budgetary allocations for social welfare programs. Defense Minister Amir Peretz, who had championed many of those programs, told a meeting of the Labor Party on Tuesday that they would need to "let go" of many of their plans," said several Labor MKs present. "There was outrage, especially among some of the more 'social' MKs, that Labor had lost its way and become the 'Defense Ministry' party," said one Labor MK. In Shas, where MKs had also planned to allocate much of their funds to socioeconomic programs, there was widespread disappointment, but resignation at the situation. Daniel Kennemer contributed to this report.