The Finance Minister will be presenting a plan to the government next week to divert NIS 2.85 billion from the budgets of other ministries to the Defense Ministry.

Defense Minister Binyamin Ben-Eliezer has been demanding a substantial increase of rather more than that. The ministry does not have the budget to cover the mounting costs incurred by the hostilities between Israelis and Palestinians, he says.

Finance Minister Silvan Shalom's plan involves cutting 4% from the budgets of all the other ministries across the board. Civil service wages will not be affected, however, and contracts will be honored.

The 4% cut will only generate NIS 1.64 billion.

The treasury has several suggestions for generating the shortage. One is to defer by six months a bill that would increase child allowances for large families with more than five children.

Another is to reduce the government subsidy granted to new immigrants to buy electronic appliances for the home from NIS 10,000 to NIS 5,000. The treasury notes that appliances have become cheaper due to a tax cut.

The Ports and Trains Authority will be required to hand over NIS 350 million from its cash reserves. Of this sum, the defense establishment will get NIS 300 million. The other NIS 50 million will be used to improve transportation infrastructure.