Netanyahu, treasury and defense officials agree on multi-year defense budget

Reported NIS 68 billion to be included in upcoming national budget, which finance minister has reportedly threatened to veto if not handed West Bank powers

Emanuel (Mannie) Fabian is The Times of Israel's military correspondent

Front L-R: Finance Minister Bezalel Smotrich, Prime Minister Benjamin Netanyahu, Defense Minister Yoav Gallant and IDF chief Herzi Halevi following a meeting on the defense budget at the Prime Minister's Office, February 22, 2023. (Courtesy)
Front L-R: Finance Minister Bezalel Smotrich, Prime Minister Benjamin Netanyahu, Defense Minister Yoav Gallant and IDF chief Herzi Halevi following a meeting on the defense budget at the Prime Minister's Office, February 22, 2023. (Courtesy)

The prime minister, finance minister, defense minister, and military chief on Wednesday night agreed on a multi-year defense budget, their offices said in a joint statement, without mentioning the exact sum of the funding.

The statement on Thursday morning said that the agreement had been reached following “in-depth staff work.” The sum would be included in the 2023-2024 state budget, which needs to be approved by May 28, six months after the government was sworn in.

Channel 12 news, without citing a source, said the budget would amount to NIS 68 billion ($18.8 billion).

The report said the Finance Ministry demanded the budget be around NIS 59 billion, while the defense establishment demanded NIS 70 billion.

“Under the agreement, provision has been made for issues regarding mandatory service, the strengthening and armament of the IDF, a career service model, the salaries of career personnel and pensions,” the joint statement said.

Channel 12 reported that the sides agreed to a compromise on the issue of army pensions.

If followed through, it will be the first multi-year defense budget passed since 2015.

“This is an important achievement for the security of Israel and the Israeli economy, a multi-year plan that will strengthen the IDF and ensure the stability and strengthening of the IDF,” Prime Minister Benjamin Netanyahu said.

Finance Minister Bezalel Smotrich — who is also a junior minister in the Defense Ministry, and has reportedly threatened to vote against the state budget if he is not handed authority over a Defense Ministry unit that oversees civilian affairs in the West Bank — hailed the agreement.

“The multi-year plan is great news for the IDF, the Defense Ministry and the State of Israel. With God’s help, the plan will allow the IDF to maintain the resilience and strength of the State of Israel, and to prepare for the various security challenges,” Smotrich said.

Prime Minister Benjamin Netanyahu (left) and Finance Minister Bezalel Smotrich at a press conference at the Prime Minister’s Office in Jerusalem, on January 25, 2023. (Yonatan Sindel/Flash90)

Defense Minister Yoav Gallant, who has clashed with Smotrich, thanked Netanyahu and the finance minister for “their partnership.”

“I welcome the multi-year budget agreement that will enable the advancing of security in a period that is replete with challenges and risks. The budget will allow the IDF and the Defense Ministry to prepare for the threats we face and to preserve their quality personnel, which we need,” he added.

Under the terms of a coalition agreement between Netanyahu’s Likud and the Religious Zionism party, Smotrich was made a minister within the Defense Ministry and given independent authority over the hybrid civil-military Coordinator for Government Activities in the Territories (COGAT), and its office, the Civil Administration.

The move is facing significant pushback from within the security establishment as well as the Biden administration, and it has yet to be implemented, infuriating Smotrich.

Transferring the authority to Smotrich would give him the power to rein in enforcement against illegal Israeli construction in the West Bank, and increase enforcement against illegal Palestinian construction.

former legal adviser to the defense establishment told The Times of Israel in a recent interview that the government would need to amend two of Israel’s quasi-constitutional Basic Laws to hand the authority over COGAT and the Civil Administration to Smotrich.

The illegal settlement outpost of Gofna on Sunday morning, February 12, 2023, before it was evacuated and demolished by Border Police and Civil Administration staff. (Courtesy)

Military chief Herzi Halevi also praised the move to approve a multi-year defense budget. “The budget that was agreed upon will allow the IDF to plan and implement a multi-year plan that is adapted to the security challenges in the coming years, alongside maintaining quality personnel, especially combat soldiers and young career officers,” he said.

The 2022 defense budget was NIS 58 billion ($17.8 billion).

Before that, the Defense Ministry and IDF had been operating without a proper budget for two years as the government failed to pass a national budget for 2020 and 2021. Netanyahu at the time was accused of deliberately refusing to pass a budget in order to bring down his power-sharing government so that he could avoid passing the premiership to Benny Gantz, as had been agreed.

In place of a proper budget, the military had operated based on its 2019 budget of NIS 55.3 billion ($17 billion), with occasional one-off increases.

A large portion of the upcoming defense budget is expected to go toward IDF preparations for a potential strike against Iran’s nuclear program, including the procurement of new advanced fighter jets.

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