Cabinet Postpones Decision on Proposed Il 2 Billion Budget Cut

The Cabinet decided today to defer for one week a decision on an IL 2 billion budget cut urged by Finance Minister Yehoshua Rabinowitz. The deferment was requested by Defense Minister Shimon Peres who firmly opposed a reduction, reportedly of some IL 800 million, proposed for the Defense Ministry. Peres said he wanted more time to “further study” the issue.

Housing Minister Avraham Ofer also voiced objections to the budget cut, arguing that it would create further unemployment in the construction industry where joblessness is already high. Rabinowitz explained that cutbacks were necessary to maintain the IL 85.2 billion budget ceiling for the current fiscal year. He said the Cabinet’s earlier calculations were based on a 25 percent rise in costs whereas the actual cost increase will run over 30 percent this year. He was challenged by other ministers to tighten up on income tax collections to bring more revenue into the Treasury.

Much of today’s Cabinet session was devoted to reports and assessments of the situation in Leban Lebanon by Premier Yitzhak Rabin, Peres, Foreign Minister Yigal Allon and Shlomo Gazit, chief of military intelligence. The Cabinet sat as a ministerial defense committee for that part of its discussions which were classified as secret.

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