Why Smotrich doesn’t trust Israel’s defense brass to spend for tomorrow’s wars

On Wednesday evening, Finance Minister Bezalel Smotrich’s office announced that it had reached an agreement with Defense Minister Yoav Gallant to form a public committee to examine defense spending.

The establishment of the committee — which will be comprised of representatives of the finance and defense ministries, as well as the Prime Minister’s Office — “is an important step for the economy and security,” Smotrich declared, arguing that the events of October 7 and the subsequent war have “undermined many of the basic assumptions” behind military spending.

Smotrich’s statement, which was not met with a parallel announcement by Gallant, came after months of tensions between the two cabinet ministers over the nation’s defense budget — a clash that has reportedly delayed the purchase of two fighter jet squadrons and allegedly prevented the transfer of over NIS 6 billion ($1.6 billion) in funds needed for the ongoing war in Gaza.

The tussle goes back to negotiations over the 2024 amended state budget, which was passed by the Knesset in March. The budget included an additional NIS 70 billion ($19 billion) in funding for the military and civilian wartime needs, but in exchange for the earmark, Smotrich said Gallant agreed to create a committee to examine defense outlays, though the Defense Ministry never actually followed through.

Smotrich’s demand for oversight over defense spending is a product of his conviction that after October 7, those currently in charge of the military should be barred from making long-term decisions on the Israel Defense Forces’s future fighting capabilities.

This thinking has led to a number of public spats with both Gallant and IDF Chief of Staff Lt. Gen. Herzi Halevi.

‘Failed conception’

Speaking to the press at the start of his Religious Zionism party’s weekly faction meeting on March 11, the nationalist politician lashed out at Halevi over a recent round of senior appointments, asserting that the current IDF brass could not be allowed to choose the army’s future leaders.

Rather, in the wake of the “failure” of October 7, the IDF’s leadership mandate must only be “to conduct the war and that’s it,” he said, arguing that Halevi had “no mandate to design the new and reformed IDF.”

“To be clear, now is a war and I fully support the IDF at all levels and in all ranks, even when I do not agree with you on everything,” he continued, adding that the IDF cannot “take advantage” of this support to determine Israel’s future security strategy.

A week later, Smotrich continued his public assault on Halevi, blaming him for the country’s failure to prevent Hamas’s October 7 massacre in an interview with Channel 12.

“This IDF chief of staff brought us one of the greatest disasters in the history of the country,” Smotrich stated.

Both Smotrich and National Security Minister Itamar Ben Gvir have blamed what they call “the conception,” or Israel’s overarching security strategy prior to October 7, for the failure to predict and counter the attack. They have accused Gallant, Halevi and others of failing to discard what they see as failed strategic thinking, and fear they will continue investing defense funding in line with the bunk conception.

Ben Gvir has also spoken out against new senior appointments, even going so far as to call for Gallant’s termination over the issue.

It is that belief that the current military leadership is invested in a false “conception” of how to defend the country which has led Smotrich to oppose allowing the current establishment to determine future defense spending without increased oversight.

“Over the last couple of months, all the conceptions of the army failed completely,” MK Ohad Tal, a member of Smotrich’s Religious Zionism party, told The Times of Israel on Monday.

“The conception of having a small army, which is mostly based on intelligence, well, that fully collapsed on October 7, no doubt about it. The decision to reduce the ground forces of Israel, of course, failed miserably,” he said. “You cannot allow the people who failed miserably to shape the next command of the army.”

He insisted that the immediate war needs were fully budgeted, but the Israel Hayom daily reported Tuesday that the ongoing dispute over spending had prevented the transfer of almost $1.7 billion (NIS 6.3 billion) in funds needed for the war in Gaza.

In a tweet, Smotrich dismissed the report as “fake news” while neither Gallant’s office nor the IDF would confirm or deny its accuracy.

In an extended Facebook post on Sunday, Smotrich claimed that in the “months leading up to the war, I tried respectfully and politely to challenge, ask questions and share, within the cabinet and in other forums, and I ran into a wall in a way.”

“If I bear responsibility for October 7, it’s because I didn’t flip over the tables then, I didn’t insist and stand my ground,” he insisted.

He added that he “emphatically refuses to be a rubber stamp for tens and hundreds of billions of shekels that will be invested incorrectly.”

No winging it

The idea that the current military leadership cannot be allowed to make long-term decisions is also the rationale behind Smotrich’s April decision to veto the approval of the procurement of new F-15 and F-35 jets until the oversight committee was convened.

“Doing the same thing over and over again without learning from past mistakes will bring us a disaster,” he said at the time, refusing to approve “strategic and long-term future force build-up” until after the committee publishes recommendations on the defense budget.

The two fighter jet squadrons, 25 F35i stealth fighter jets and 25 F-15IA fighter jets — the Israeli variant of the advanced F-15EX — were slated to come out of the $3.8 billion in military aid the US gives Israel annually, most of which must be spent on US arms.

The holdup angered Gallant, who earlier this month told reporters that “the Israeli perception that it is possible to provide increased security with less money, in the face of threats that are only increasing along with additional combat arenas, is a wrong perception that needs to change.”

Gallant said Israel’s defense budget needed to be doubled, citing the recent Iranian missile and drone attack on the country, and argued that if Israel did not “complete the process of purchasing the squadrons from the US within a month, the planes will be delayed for three years.” The extra time, he contended, would add an extra NIS 1 billion ($269 million) to the price tag for the deal.

A spokesperson for Gallant did not respond to an inquiry from The Times of Israel.

The banker weighs in

Bank of Israel Governor Amir Yaron on Thursday backed the establishment of a committee to examine Israel’s defense budget, saying the ongoing war does not necessitate a “blank check” to the military going forward.

Yaron has been urging such a step since January and has long called on the government to make fiscal adjustments to prevent the budget deficit from spiraling out of control due to the spike in defense and other war costs.

According to Yaron, the ongoing war with the Hamas terror group is slated to cost Israel NIS 253 billion ($67 billion) in defense outlays, expenditures for civilian needs and lost tax income in the years 2023 to 2025.

“A prosperous economy requires security, and security requires a prosperous economy. Therefore, the war should not bring with it a blank check for permanent defense expenditures, and proper balances have to be found,” Yaron stated at a conference on Thursday.

Emanuel Fabian, Sharon Wrobel, Reuters and Times of Israel staff contributed to this report.