1974/75 Budget Under Study; Hiked from Il 20 to Il 32 Billion
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1974/75 Budget Under Study; Hiked from Il 20 to Il 32 Billion

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The Cabinet devoted several hours yesterday to what was termed as “first thoughts about next year’s budget.” Finance Minister Pinhas Sapir discussed ideas for the 1974/75 record budget, and promised no economic slowdown was in sight.

Details of the budget will be prepared and discussed beginning today by the ministerial economic committee. It is to be submitted by the government to the Knesset by March. The extent of the new budget was not revealed, but it is assumed to be more than IL 30 billion. This year’s budget was originally set at IL 20 billion, but because of the war was increased to IL 32 billion.

In his presentation Sapir said the greatest portion of the next budget will be for security. The proportion of security expenditures to the gross national product rose from 12 percent in 1965 to approximately 48 percent this year. Next year’s budget will probably be the first in which more than 50 percent of the GNP will be devoted to security expenditures.


The heavy security burden forces an increase in the foreign currency deficit. This year’s deficit in foreign currency is estimated to be $2.5 billion compared to $1.75 billion in the last fiscal year. Next year’s deficit will be higher, partly to be covered by United States foreign aid. The Cabinet decided yesterday on a series of measures intended to “depress the standard of living” in the government offices and of officials. These were the first measures adopted following the recommendations of a ministerial saving committee, headed by Agriculture Minister Haim Gvati. The new measures are intended to save IL 30 million in the next two months, a cut of 20 percent in the expenditures in that period.

The measures the Cabinet adopted include: replacement of large official cars, including those serving ministers and deputy ministers, by medium sized cars; mileage quotas to be frozen until the end of the next fiscal year; the policy of providing high officials with full-time cars to be reviewed; telephone expenses to be frozen; special efforts to be made to see that officials do not use office telephones for private calls; travel abroad on public account (government, Jewish Agency, municipalities, universities, Histadrut) will be decreased.

The Cabinet also discussed in detail problems arising from the implementation of the recent law providing special privileges for discharged soldiers. Housing Minister Zeev Sharef told how in some ministry district offices soldiers entered with their personal weapons in order to make their demands for better housing more impressive. Labor Minister Yosef Almogi will coordinate the services of the various ministries for discharged soldiers. Special bureaus will be set up in the urban centers to provide demobilized soldiers with the various services–all under one roof.

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