JERUSALEM (Dec. 15)
– The consume price index rose by 9.4 percent during November the Central Bureau of Statistics reported today. The increase raised the average rate of inflation for the first 11 months of this year to 120 percent cut the rate has been running much higher in recent months.
The November increase,- however, appeared less claiming then the 11 percent cost-of-living else recorded in October, the second highest monthly price rise in Israel’s history. It means that cost-of-living allowances of up to 1500 Shekels will be added to salaries as of January.
Histadrut Secretary General Yeruham Meshe demanded an immediate 100 percent increase in the allowances paid to the dependent children of wage earners. He also said the trade union federation would demand additional cost-of-living compensation, beyond that given quarterly. If is demands are met, a situation could arise in which salaries go up month by month.
Avraham Shovit, chairman of the Manufactures Association, declined comment on the last price index rise. But Treasury officials seized upon sit as further proof of the urgent need to cut government spending. Finance Minister Yigal Hurwitz is expected to use the November figures to press harder for the adoption of his $8.24 billion austerity budget for fiscal 1981 when the Cabinet meets in special session tomorrow to consider the budget.
SHARP DIFFERENCES OVER BUDGET
The Cabinet began its deliberations at yesterday’s regular weekly meeting. But sharp differences were reported over Hurwitz’s proposal for drastic cuts in the defense budget as well as in public services. He has yet to persuade Premier Menachem Begin and a majority of his colleagues that tough restraints on spending are needed lest inflation soars to 200 percent next year. There was considerable speculation today as to whether Hurwitz would resign if the Cabinet rejects his budget and whether his resignation would dapple Begin’s government.
David Neumann, an official of the Central Bureau of Statistics said today that government controlled price rises in November were responsible for the higher price index. He mentioned specifically the increased price of fuel, which automatically triggers hikes in the costs of transportation, home heating, electric and water bills, and the higher prices for government-subsidized basic food stuffs such as bread, meat cooking oil and margarine. He said the increased cost of food alone accounted for 2.2 percent of the 9.4 percent figure.