Finance Minister Yigal Hurwitz’s economic cabinet yesterday approved a defense budget for fiscal 1981-82 of 15.5 billion Shekels ($2.04 billion), about 25 percent less than the 21 billion Shekels (52,76 billion) the Defense Ministry had asked for. The budget request was trimmed despite claims by Chief of Staff Gen. Raphael Eitan and other senior military officers that the reduced budget would seriously harm Israel’s defense industries and its defense establishment generally.
The full Cabinet is expected to approve the economic ministers’ decision at a later session. Two concessions were made to the Defense Ministry. The government will consider, by the middle of next year, whether to add another half billion Shekels to the defense budget “after a thorough review of the needs vis-a-vis the general economic situation.” The government also agreed to defer all additional expenses caused by inflation to the following year’s budget.
VIEWED AS ANTI-INFLATION MEASURE
The economic cabinet’s decision, strongly pressed for by Hurwitz, is essentially an anti-inflation measure. It was taken unanimously after a heated six-hour debate attended by Premier Menachem Begin in his capacity of Defense Minister and the top army brass led by Eitan.
They warned that the cuts would force many career soldiers and officers to be discharged and would affect the training of recruits. But the ministers reportedly did not put much stock in those arguments. When the hearings ended, all experts, including Bank of Israel Governor Arnon Gafni, were asked to leave while the decision stoking process proceeded.
Deputy Defense Minister Mordechai Zipori said afterwards, “Despite everything, we will be able to live with it. There will be no less security.” Economic analysts observed that the decision does not guarantee on end to inflation. They said that would depend on parallel cuts in civilian spending.
CONSEQUENCES OF BUDGET CUT
Meanwhile, senior army officers, pondering the consequences of the out in the military budget, said some 8000 soldiers and Defense Ministry officials will have to be dismissed and some 20,000 workers in the military industry will lose their jobs. The reduction in the budget will also mean delays in the development of the planned new Lavie combat jet, a reduction in the output of the present Kfir aircraft and a cutback in the manufacture of the Merkava battle tank, according to the army officers.
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