TEL AVIV (Oct. 12)
Finance Minister Pinhas Sapir declared as absolutely unfounded, rumors that money from the national defense budget would be diverted from defense items to help solve social problems. In a broadcast interview yesterday over the armed forces radio service, Sapir said that whatever money was needed for Phantoms, Skyhawks, tanks, armored half-tracks and electronic devices for the military was “sacred” and would not be used for other purposes. He did not say however whether that section of the military budget paid for by Israeli pounds would or would not be cut. “Our problem is not dollars. Our problem is Israeli pounds and if we print more pounds it would mean catastrophe so that we have to make do with the pounds we have, Sapir said.
Regarding other economic matters, Sapir said he supported proposed labor legislation that would outlaw strikes by government and public service employes for the duration of their contracts. He confirmed that higher cost of living allowances would be paid beginning Jan. 1, 1972 but warned that “it will not be gold from the sky.” He said income taxes may be lowered but did not specify by how much or who would benefit. Finally, Sapir said Israel hoped for more grants from the United States–$200 million in economic aid and $300 million as a loan.