Netanyahu fails to stop defense budget agreement

Moshe Kahlon, Benjamin Netanyahu photo: Flash 90
Moshe Kahlon, Benjamin Netanyahu photo: Flash 90

Source close to Minister of Finance Moshe Kahlon: Netanyahu should take a drink of water and calm down.

Prime Minister Benjamin Netanyahu has failed in his attempt to prevent the signing of an agreement on the defense budget by the Ministry of Finance and the Ministry of Defense. Netanyahu wanted changes made in the agreement. He cleared his agenda yesterday for an effort to exert pressure on all those involved in the process, and spent all his time on the matter. He personally called Ministry of Finance budget department personnel and the two ministers involved, but in vain. Ministry of Finance director general Shai Babad and Ministry of Defense director general Dan Harel signed the agreement, which aroused a serious dispute among senior Ministry of Finance officials in recent days.

In addition to Babad and Harel, Ministry of Finance budget director Amir Levy also signed the agreement. Several changes were inserted in the agreement, following a hearing conducted by Babad for Accountant General Michal Abadi-Boiangiu and wages department director Kobi Amsalem, who were angry about being excluded from the negotiations. It was also agreed that joint work teams from the Ministries of Defense and Finance would discuss implementation of the main points of the agreement, so that additional changes could be made within 45 days.

Accusations were heard behind the scenes that Netanyahu had tried to change the ministers' decision not for substantive reasons, but in order to prove that he was in charge. "Netanyahu talks about the defense budget in lofty terms, but the changes that he is trying to institute will eventually harm officers and NCOs in the career army," it was said.

A source close to Minister of Finance Moshe Kahlon today asserted that Netanyahu was trying to arouse hostility between Kahlon and Minister of Defense Moshe Ya'alon for political reasons. "Netanyahu has developed an obsession with the defense budget, following the failure of the Locker Committee. The agreement was signed without him, and it's signed and finished. Netanyahu should take a drink of water and calm down," the source remarked.

The fate of all the serious objections brought up by Abadi-Boiangiu and Amsalem, whether the agreement had been amended, and what Kahlon will do about the crisis that occurred in the Ministry of Finance during his work visit to New York are still unclear. A very uncomfortable atmosphere has prevailed in recent days following accusations involving the budget department, which conducted the negotiations for the agreement without informing the Accountant General and the wages department director. Among other things, Abadi-Boiangiu threatened that she would consider an appeal to the Attorney General because she said that the budget director had exceeded his authority.

A harsh dispute over the emerging agreement with the Ministry of Defense occurred following a letter sent a week ago by Prime Minister's Officer director general Eli Groner to Babad. The letter, a copy of which was obtained by "Globes," indicates that Groner, who had received the draft agreement, was surprised to discover that the heads of the professional departments in the Ministry of Finance were not familiar with the agreements. The following day, Groner sent another letter, the third on the subject, listing the topics he believed required the attention of the relevant professionals. Groner's concern focused on a bridging grant for soldiers in the permanent army averaging 12 months' wages, to which he objected.

A senior defense establishment source said in response that the problem involved was expected to affect pension costs in the long term, if at all (in around 2050), and was not related to the topics dealt with by the current agreement. As for the agreement itself, the source said, "The agreement is balanced and fair, and creates a structural partnership. All the attempts to portray the agreement as a victory for one side are nonsense. This isn't a zero-sum game."

The defense establishment's achievements in the agreement are the guarantee of a multi-year budget five years in advance, adoption of a personnel management model devised by IDF Personnel Directorate head Major-General Hagai Topolansky instead of the Locker model, removal of the budget for rehabilitation of the wounded and for bereaved families from the IDF budget, and a special separate budget and special R&D budget of NIS 800 million. The Ministry of Finance's achievements are a commitment to extend the computer system currently operating in the Accountant General Department to the budget department, streamlining amounting to the difference between the budget that should have been set according to Brodet Committee guidelines (NIS 63 billion) and the actual budget (NIS 59 billion), and the addition of budget department representatives to the internal IDF streamlining committees. Concerning the complaints that pension costs had not been reduced in the agreement, sources involved in the agreement noted today that the new model would reduce pension costs by NIS 1.5 billion a year, starting in 2023.

Published by Globes [online], Israel business news - www.globes-online.com - on November 25, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

Moshe Kahlon, Benjamin Netanyahu photo: Flash 90
Moshe Kahlon, Benjamin Netanyahu photo: Flash 90
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018