Yesterday, the Bank of Israel published a report that supports the position of Minister of Defense Ehud Barak over Minister of Finance Yuval Steinitz with regard to the defense budget. The Bank of Israel says that the Ministry of Defense has not exceeded the structure of the Brodet committee for the defense budget, and any deviations were both reasonable and were on solid grounds.
The Bank of Israel said that the original defense budget for 2011 was NIS 1 billion less compared with the Brodet structure, although the budget supplements that are likely to be approved through the end of the year will result in a budget overrun of NIS 2 billion. The defense budget for 2012 is also NIS 1 billion less compared with the Brodet structure, although the pending supplements will result in a budget overrun of NIS 1.6 billion.
These overruns are less than 0.2% of the state budget, a figure that is far lower than the figure that the Ministry of Finance has been contending for a long time.
The Bank of Israel also says that the defense budget consistently exceeded the Brodet structure by NIS 400 million a year in 2008-10, and that the total excess was less than the cost of Operation Cast Lead in January 2009, which the prime minister approved as a budget deviation.
Supplements to the defense budget in 2008-11 totaled NIS 3.2 billion, which is about the same amount as the cumulative erosion in the procurements budget due to the lack of inflation adjustments in 2008-09 under the agreed upon linkage agreement.
Published by Globes [online], Israel business news - www.globes-online.com - on December 6, 2011
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