In an interview with US weekly "Defense News", outgoing Minister of Finance Yuval Steinitz has been talking about his repeated clashes and ultimate victory over Minister of Defense Ehud Barak, two IDF chiefs of staff, and the powerful IDF and Israeli defense ministry lobby over the IDF's (budgetary) black hole. He claims the victory has already saved Israel hundreds of millions of shekels in financial restraint measures
Steinitz said, "It was a total black hole, and that’s why transparency and accountability constituted the first and most important leg of our sweeping reforms. Up until last year, the finance minister, relevant Knesset leaders and even the prime minister didn’t have a clue about how money was spent. The government approved annual top-line budgets and could earmark funds for specific projects, but nobody could verify how much of those funds actually went to the intended project."
He added, "The tax authorities didn’t even know how much to deduct from salaries because we had no access to their books. It was an egregious violation of the law, but that was the norm. It was axiomatic that the defense budget was untouchable."
Steinitz recalled Barak's fierce opposition, "The first time I raised this issue in the cabinet, Barak said, 'Over my dead body. This will never happen.' He accused the Treasury of trying to control and dictate to the Defense Ministry. It took me 2½ years of hard struggle vis-à-vis Barak, two IDF chiefs of staff and a very strong lobby."
Steinitz outlined the new measures of transparency introduced, "We have computer terminals in the budget department of the Treasury that are directly connected to the Defense Ministry. We see all contracts, tenders, progress payments and salary expenditures. Now, we see exactly where the money is going, what is the tempo of spending, and whether they are running into trouble. Finally, after 65 years, we have proper oversight."
Steinitz said that the new changes and cuts including pension cuts will save the country several billions of shekels annually by the end of the decade.
Published by Globes [online], Israel business news - www.globes-online.com - on February 24, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013