Defense, Finance Ministries agree on NIS 59.1 billion 5-year budget

In 2022, male soldiers will have their service time reduced by a further 2 months.

PM Benjamin Netanyahu at the Knesset (photo credit: MARC ISRAEL SELLEM/THE JERUSALEM POST)
PM Benjamin Netanyahu at the Knesset
After years of bitter feuds and recriminations over past defense budgets, officials from the Defense and Finance ministries buried the hatchet on Monday, unveiling new details of an agreement to maintain an annual 59.1 billion shekel budget from 2016 to 2020.
“This [the voluntary agreement] is an unusual occurrence.
Therefore, its chances of holding up are higher” compared to other solutions, Maj.-Gen. (res.) Dan Harel, director-general of the Defense Ministry, said in Tel Aviv.
The agreement, signed on November 24, means a “stable budget agreement will be in place for the next five years, with no add-ons or reductions.
I think this is a huge achievement. Until now, I’ve been trying to run the ministry without a budget,” Harel added.
The two ministries also have agreed that, by 2022, male soldiers will see their compulsory service time reduced by a further two months to two and a half years.
Harel and Finance Ministry director-general Shai Babad presented the arrangement’s details, indicating that the two had to overcome multiple crises and disagreements before reaching a deal.
The arrangement includes an overhaul of the professional military model designed to save NIS 1.5 billion annually, as well as removing a number of programs from the defense budget that ate away at the IDF’s core annual budget, which is earmarked for training and force build-up.
In line with the agreement, the core budget that will be directed to the IDF each year will be NIS 31b., meeting the expectations of IDF Chief of Staff Lt.-Gen. Gadi Eisenkot.
The agreement, they said, also set a new precedent in terms of transparency, with Finance Ministry officials receiving realtime computerized updates on all aspects of the Defense Ministry’s monetary decisions.
“This will enable Gideon [the name of the IDF’s multi-year program] to be implemented from 2016 to 2020,” Harel said.
“As soon as I know my budget ahead of time, I can plan. That makes my spending more economically efficient.”
The outline of the budget holds that from 2016 and 2020, the Defense Ministry will receive a base budget of 56.1b.
shekels, and an additional transfer of 3b. shekels every year if the ministry makes good on its efficiency and restructuring commitments.
The deal will see several costly programs – such as the IDF’s move to the South; the construction of new campuses for the Intelligence and C4I Corps.; the privatization of Israel Military Industries; and costs associated with defending Israel’s exclusive economic zone in the Mediterranean – fall under their own separate budgets, away from the overall defense budget.
Meanwhile, the IDF will reshape its professional military model so that fewer officers age 26 to 28 are promoted from captain to major, while those who do succeed become a core part of the IDF’s mid-ranking command level. Then, at age 35, the officers either will be promoted to the rank of lieutenant-colonel or leave the military with a one-off grant before joining the work force.
Only those who remain in the defense establishment after the age of 35 will receive military pensions, and they will retire at 42, thereby bringing down the age of senior commanders in the military.
The long-term result will be increased supervision of military salaries and smaller IDF pensions, Harel said.
“This is a model of excellence – only those who are promoted will continue on. It’s the up or out model,” he said. “By 2026, we will reach a stable model in the professional military.”