The scope of the financial crisis within the Israeli army expands beyond the postponement of projects and equipment purchases, and affects one of the most sensitive issues of the military establishment. It is the ability to retain competent officers and personnel and expand the army’s staff in response to the lessons learned from the events of October 7.
A report prepared by journalist Amir Bukhbut on the Israeli Walla website revealed the military leadership’s failure to keep quality personnel in permanent service due to financial gaps, which hindered the General Staff’s plans to expand the ranks of the army, despite this step being approved as one of the lessons learned from the war and its field repercussions.
Although the Knesset Finance Committee approved last week to pump about 15 billion additional shekels into the budget of the Ministry of Defense and the Army to pay previous obligations and the accumulated deficit – consisting of 11.75 billion shekels from the state’s general reserve and about 3 billion shekels transferred from various security and transportation items – these funds have not yet been practically disbursed, awaiting the signature of a ministerial committee that, according to military officials, is occupied by preparing for the upcoming elections.
Senior officers said that these gaps have left a series of negative repercussions, most notably the postponement of high-cost projects to next year, with the exception of ongoing activities, in addition to damage to deals to purchase aircraft, advanced weapons, and ammunition. Preparations for the winter also faltered due to the lack of sufficient financial funds to conclude supply contracts with civilian companies importing from abroad.
The crisis extended to include a reduction in reserve service days despite the multiple fronts, which prompted the Operations Division of the General Staff to bear field risks in order to preserve the available budget framework. However, the biggest concerns focus on two strategic paths that threaten the foundations of the military institution: The first is the multi-year military plan, and the second is to build and expand manpower.
Regarding the multi-year plan, the army and the Ministry of Defense are awaiting the formation of the new government to approve the transfer of hundreds of billions of shekels according to the directives of Prime Minister Benjamin Netanyahu. The security establishment fears that bureaucratic delays will harm projects and purchases for the next decade, amid a heated arms race taking place in the region.
The second and more sensitive file relates to human power. Based on the directives of the General Staff and with the approval of Defense Minister Yisrael Katz, it was decided to increase the number of the army, but implementation collides with the obstacle of funding gaps in light of the raging conflict between the Ministry of Defense and the Ministry of Finance.
In light of the lack of sufficient jobs within the “permanent fixed service” – which arranges long-term financial obligations represented by the extended “bridge retirement pension” for the retiree from the age of 45 until the civil age, the ceiling of which is set by the Ministry of Finance – the army resorted to signing contracts extending the years of “initial permanent service” instead of tenure.
The report explained that “initial permanent service” covers the military’s first years until approximately the age of 28 (or about 7 years) through temporary, renewable contracts without long-term retirement obligations. In contrast, “tenured service” is an exclusive and expensive path usually given to 28- to 32-year-olds or sergeants-majors and majors, to provide job stability and security of survival until retirement.
Senior officers warned that relying on extending initial service only complicates the tasks of the Human Resources Division in retaining competencies and meeting the requirements of war, warning of long-term negative repercussions on the future of the army and the quality of its elements.
Between suspended financial allocations, postponed projects, and a crisis in attracting and retaining talent, the current crisis shows that the financial dispute between the army and the Ministry of Finance has turned into a fundamental obstacle that threatens the ability of the Israeli military institution to rebuild its strength for the future.
