The Finance Ministry is reportedly considering a NIS 2 billion cut in military funding in order to meet increased demands for public benefits in light of the housing protest. The money would go to the ministries of health, welfare, education, and housing instead.
Defense Ministry officials say the move would be bad for the country's security..
One official accused the Finance Ministry of attempting to mollify protesters, instead of holding an open and honest public debate over the root causes of social issues.
Deputy Defense Minister Matan Vilnai warned Tuesday that cutting the defense budget would create more social crises than it would solve. “We must keep in mind that the defense budget, besides providing security, provides thousands of jobs for Israelis. Budget cuts would lead to the closure of many factories in outlying communities '” he said, while touring a factory in the missile-scarred development town of Sderot.
Vilnai also warned against “neglecting the existing security challenges,” a decision that could set Israel back by years, he said, rather than having it innovating to meet changes and leaving the army facing the same lack of preparedness that led to serious problems in the Second Lebanon War.
“The idea of social welfare at the expense of national security is an idea that is bad for the state of Israel,” he concluded.
Finance Minister Yuval Steinitz has presented a new budget proposal to replace the original plan for 2011. However, he has warned that the government may have less money to work with than originally believed, as tax income was lower than expected in the first half of the year.
Steinitz has also warned that adjustments to the national budget must be weighed carefully, as significant changes in economic policy could lead Israel into a financial crisis. It has so far weathered the world financial crises successfully and must take care not to end up like Greece and Portugal.