Israel’s state budget for fiscal year 1972-73, which begins April 1, will be $3.78 billion compared with $3.63 billion the current year, according to figures submitted to the Knesset today in advance of Finance Minister Pinhas Sapir’s speech this afternoon introducing the budget.
Defense costs account for 33 percent of the new budget, compared with 39.8 percent last year, but last year a sum of $100 million for payment for American Phantom and Skyhawk jets was not used, as the planes were not delivered. Replying to questions, Finance Ministry Director General Avraham Agmon and other senior officials said the gross national product was expected to rise by 7 percent in the next fiscal year, the same as this year.
Full employment will continue, they said, as will the absorption of newcomers. While private consumption per capita this year rose by only slightly more than 1 percent, the projected increase for next year is 3 1/2 percent at constant prices. Israel’s foreign debt–$1,333 per capita–is the highest in the world, totalling $4,2 billion. However, 90 percent of this consists of long term loans, repayable over the course of 10 years or more.
PRICES, SALARIES TO INCREASE
There will be no increase in the absolute rate of taxation. But rises in prices and salaries estimated at a minimum of 4 percent are expected to bring in 15 percent more revenue in both direct and indirect taxes. If prices and wages rise beyond this level, it was indicated, taxes will also be increased. In addition, an added-value tax like that in many European countries is contemplated, and may be introduced at any time after Oct. 1. Israelis are already the most heavily taxed population in the world.
A large part of the outlay for immigrant absorption does not appear in the state budget. The Jewish Agency has taken it upon itself to shoulder this burden. It will provide 20,000 immigrant “solutions” while the government will provide 18,500. “Solution” refers to the purchase, long-term lease or erection of dwelling units.
The income not derived from taxation will be $1,43 billion. This includes loans such as Israel bonds, United States government grants, a loan from West Germany and internal loans, as well as some repayment to the government of debts owed it. A sum of $620 million is expected to be added to the nation’s deficit this year.
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
