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Economic Ministers Look to Treasury for Budget Cut Ideas

The Ministerial Economic Committee met for three hours today without deciding where and how to cut the budget in order to comply with yesterday’s Cabinet decision to reduce the government’s expenditures by IL 15.5-IL 17 billion this year. The Cabinet itself offered no help beyond the IL 7 billion it shoved from the Defense Ministry’s budget last week.

The matter was passed on to the Treasury’s budget department which is to prepare a list of proposed cuts for later consideration by the ministers.

Exactly what the Treasury has in mind is not known but the trend appears to be to reduce credit, subsidies and welfare outlays. The abolition of free high school education is a possible proposal but it is bound to meet with stiff resistance from Education Minister Zevulun Hammes. Premier Menachem Begin is expected to oppose on end to the IL 13 subsidy which the State now pays for each loaf of bread. While it would save a considerable sum, Begin is one of the main supporters of that subsidy.

Other possible cuts mentioned today include reduced allowances for children of large families; reduced State subsidies for the universities and public transportation; reduced government support of health services; and a reduction in the number of civil servants.

Finance Minister Yigal Hurwitz has rejected new taxes on grounds that they would only lead to demands for higher wages, thereby worsening Israel’s triple digit inflation.

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