A record IL 55 billion budget for fiscal 1975-76 that reflects Israel’s serious economic difficulties, was proposed to the Cabinet today. Although the budget is the largest ever drafted in Israel’s history, it falls short by IL 10 billion of the cumulative demands of all ministries and pre-supposes drastic cuts in many government activities and services.
If the budget is approved by the Cabinet and the Knesset, the government will be forced to freeze such expenditures as paving new roads. Construction for social purposes, such as housing for young couples, will be limited. Fewer new schools will be built, forcing the institution of morning and afternoon shifts at schools and the abandonment of free education for tenth graders and above which had been the original development plan of the Education Ministry.
The proposed budget would also make inevitable lay-offs in the government bureaucracy, a degree of unemployment in other areas of the economy and a reduction of government investments in the economy. Officials said after today’s Cabinet meeting that the draft budget, though submitted today, was not fully discussed and would probably be reviewed in greater detail at next week’s Cabinet session. Today’s session devoted considerable time to the 1974 supplementary budget submitted by the Treasury to take into account devaluation of the Pound and other stringent economy measures introduced Nov. 10.
COL INCREMENT APPROVED
The Cabinet, however, approved today the cost-of-living increment signed last week by the government, Histadrut and the Manufacturers Association. It will provide wage earners with IL 1200 tax-free cash in addition to their salaries and another IL 100 in government bonds. The increment amounts to a 30 percent cost-of-living allowance to help meet price increases.
Other elements of the agreement include an extension of existing wage contracts for another six months. A special committee is to submit tax reform proposals upon receipt of which Histadrut will consider a second six-month extension of the existing contracts.
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.
