JERUSALEM (Jan. 1)
Finance Minister Levi Ehskol today formally presented to the Knesset Israel’s draft 1963-64 budget totaling 2,790,000,000 pounds ($930,000,000) The draft budget, although exceeding the 1962-63 budget by 414,000,000 pounds ($138,000,000), is the first one which does not provide for any tax increase over that of the previous year.
Higher revenues are expected to result from expansion of Israel’s economy and improved tax collection methods. The draft budget is within the framework of a Government policy seeking to make 1963 the year in which Israel’s economy will have reached stability and is based on the assumption that there will be no increase in wages during the coming year.
In order to balance the budget, efforts were made to keep most items at the same level as the previous year’s expenditures. Three notable exceptions, however, were the defense budget, the education budget and debt payments.”
Defense expenditures and “special budgets” were listed at a total of 813,000,000 pounds ($271,000,000). The education budget was increased by 37,000,000 pounds ($12,333,000) over last year’s figure to total 200,000,000 pounds ($66,700,000). The increase in the debt payments was made necessary by the fact that 1963 will be the first year in which Israel’s 1951 American bond issue falls due with an initial payment in May 1963 of $30,000,000. Altogether, the Government win repay 555,000,000 pounds ($185,000,000) in both interest and principle at home and abroad.
TAXES AND INCOME FROM FOREIGN COUNTRIES TO COVER BUDGET
The development budget, totaling 553,000,000 pounds ($181,000,000) will be utilized for agricultural purposes, water development, mining, electricity, industry, transportation, roads and housing. A total of 200,000,000 pounds ($66,700,000) will be
GREATER OUTLAY OF FOREIGN CURRENCY INDICATED BY ESHKOL
The main source of revenue envisaged by the draft budget are taxes accounting for 590,000,000 pounds ($196,700,000), some 150,000,000 pounds ($50,000,000) more than last year. Customs and purchase taxes are expected to yield 283,000,000 pounds ($94,300,000) and 225,000,000 pounds ($75,000,000) respectively.
Other sources of income include 320,000,000 pounds ($107,000,000) from foreign loans; 195,000,000 pounds ($65,000,000) from the Development Bond Issue and income from United States food surplus counterpart funds; 120,000,000 pounds ($40,000,000) from German reparations under the Luxembourg Agreement; 105,000,000 pounds ($35,000,000) from local short-term emissions; and 100,000,000 pounds ($33,000,000) from the absorption tax.
Mr. Eshkol told the Knesset that the new budget would require greater outlays of foreign currency and for payment of debts which already accounts for 20 per cent of the current budget. He said that the budget is based on the premise that immigration will continue and higher allocations are therefore earmarked for housing, education, health, social welfare and other services necessary for immigrant absorption.