The Cabinet passed the 2015-2016 budget early Thursday morning after a long day of wrangling and debating.
Defense Minister Moshe Ya’alon was the only holdout, abstaining due to Prime Minister Binyamin Netanyahu’s support for recommendations by Finance Minister Moshe Kahlon to set the defense budget at NIS 55.3 billion for 2016. Kahlon conditioned on raising the budget to NIS 59 billion on the adoption of the recommendations of the Locker Committee.
The Locker Commission, headed by Maj.-Gen. (res) Yochanan Locker last year issued a 77-page report calling for massive across-the-board cuts to the IDF budget. Included were 53 recommendations on budget savings and “efficiency reforms” totaling NIS 9.6 billion annually between 2016 and 2020 that Locker said could be “reinvested” as new funds by the IDF.
Among the recommendations were cuts to pensions for IDF non-combat officers, capping the defense budget at NIS 59 billion, limiting mandatory service for men to two years and 11 percent cuts in personnel.
The IDF viewed the recommendations as short-sighted, pointing out the new challenges facing the military such as the need for advanced development of cyber defense, Iron Dome anti-missile training and technology and similar cutting-edge financial needs. At the time, Ya’alon also said the commission’s recommendations were incompatible with the threats facing Israel which have not decreased but rather, have only changed.
Additions to Israel’s present budget were made throughout the day on Wednesday to individual budgets in ministries where coalition promises had been made.
The ministers had already been warned ahead of time by Netanyahu that the government would collapse if they did not stop their demands and get behind the budget.
From the outset, on Tuesday, Netanyahu said bluntly, “The State of Israel will have a budget because otherwise it will not have a government and our economic and security situation will deteriorate. Demands always exceed what there is but in the end, the right decisions are made. We will do so this time as well.”
An extra NIS 8 billion ($2.1 billion) had already been pulled together for the NIS 414 two-year budget, but ministers clamored for more spending on education, defense and police. In addition, there was an outcry over value added tax (sales tax) which social activists want eliminated on basic goods.
An addition of NIS 1.7 billion was made, for example, to the budget of Public Security Minister Gilad Erdan over the next two years.
Cutbacks were cancelled in the budget of Sport and Culture Minister Miri Regev, and an additional NIS 50 million was found to sweeten the deal.
Education Minister Naftali Bennett received NIS 290 million for his budget as well, to ease the cutbacks to his ministry’s coffers.
“We have to continue the economic growth and that is why taxes will not increase,” Netanyahu said when introducing the budget on Wednesday. “When the money gets to the citizens, they will make better use of it than the bureaucrats will.
“There are reforms here that reduce the cost of living for citizens. It’s important to reduce the price of food, transportation and health, and to increase the supply of housing,” he said.
After having passed the Cabinet, the budget will go to the Knesset plenum for a vote on August 31. Final passage of the budget must be completed in the Knesset by November 19.