As Defense Ministry and Treasury spar over cuts, governor enters the fray (ISRAEL HAYOM) Shlomo Cesana, Zeev Klein, Hezi Sternlicht and Lilach Shoval 08/16/12)
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Bank of Israel Governor Stanley Fischer backs Defense Ministry´s
assertions that they have met all requirements so far under
efficiency drive • Finance Minister Steinitz pushes for further cuts,
says "military budget of all our Arab neighbors combined is smaller
The Defense Ministry went on the defensive on Wednesday as it
presented its position on the efficiency measures it has already
implemented as discussions began on the next national budget.
Brig. Gen. Reem Aminoach, the head of the Defense Ministry´s Budget
Division and acting financial advisor to Chief of General Staff Lt.
Gen. Benny Gantz, said Wednesday that the scope of the efficiency
measures and the funds made available for the growth of the defense
establishment between the years 2008 and 2012 stood at 9.4 billion
shekels ($2.33 billion). According to Aminoach, the defense
establishment has upheld its end of the Brodet Commission´s
recommendations on fiscal efficiency. Under the recommendations, the
defense establishment had to show NIS 10 billion in savings during
the first five years and NIS 20 billion over the next five-year
period. Aminoach presented the efficiency measures implemented by the
Israel Defense Forces and the Defense Ministry in the areas of
procurements, projects, construction and manpower, which are expected
to result in savings of NIS 30 billion by 2017.
The on-going tension between Defense Minister Ehud Barak and Finance
Minister Yuval Steinitz was palpable during the meeting. According to
the defense minister, "The trend of the last few years is a welcome
one — with budgets for the civilian ministries increasing, as opposed
to the budget for the Defense Ministry — and we are in favor of that
continuing, as long as the Brodet Commission´s multiyear budget
guideline for the defense establishment is maintained. We are not
asking for additional funds, only that we are required to meet the
Brodet Commission´s goals in a realistic manner."
Steinitz, for his part, replied that "We are in the midst of an
economic storm, and the Brodet report also took a recession into
account. The defense budget is the largest it has been in the history
of the state — over 60 billion shekels. All of the ministers think
that the Arab states are in an arms race — this is incorrect, the
opposite is true. The military budget of all our Arab neighbors
combined is smaller than ours."
Surprisingly, Bank of Israel Governor Stanley Fischer opposed
Steinitz´s position, saying, "The finance minister won´t like what
I´m about to say: The Bank of Israel has checked, and the defense
establishment has met all of its requirements outlined in the Brodet
report." However, Fischer emphasized to the other ministers, "If you
increase the defense budget it will hinder the economy´s growth."
At Wednesday´s discussions in Tel Aviv, Prime Minister Benjamin
Netanyahu said that he wanted all his Cabinet ministers participate
in the discussions, so that responsibility for the budget cutbacks
doesn´t fall solely on Barak and Steinitz. Netanyahu also said that
in addition to deciding how much money to allocate toward the defense
budget, the Cabinet would also need to decide where specifically to
invest the funds. The prime minister tied his statements to the
Iranian nuclear issue and to the changes taking place in the Middle
East, saying "we must also respond to the historic changes that are
taking place around us."
"We must be ready for the changing threats that are being directed at
the State of Israel. We must see to it that the security which
Israelis have enjoyed over past three-and-a-half years continues
under the changing conditions," said Netanyahu.
The budget debate will kick into high gear after the Jewish festivals
in September when the Knesset resumes.
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