Cabinet Defers Decision on Aridor’s Proposed 475 Billion Shekel Budget for the New Fiscal Year

The Cabinet deferred a decision yesterday on the 475 billion Shekel ($30 billion) budget presented by Finance Minister Yoram Aridor for the new fiscal year. The budget was the principal item on the agenda but Cabinet sources said that even though it occupied most or the session, the discussion was only preliminary and would be continued at future meetings.

Aridor’s proposed budget is almost double the 210 billion Shekel budget of the current fiscal year. But according to economists, it is smaller than expected because the Finance Minister has included more extra-budgetary expenditures than in past years. In real terms, the government will be spending more, they said.

The extra-budgetary funds will come out of ministries which have income as well as expenditures. The Housing Ministry will expand its activities on a smaller budget by utilizing loans from commercial banks. The Communications Ministry will be asked to transfer less of its earnings to the Treasury and use the balance to finance projects that ordinarily would have come out of its budget.

Aridor gave the Cabinet an optimistic forecast for the economy in the new fiscal year. He predicted economic growth will continue with a five percent rise in the gross national product; inflation will decrease by 10 percent and the balance of payments will improve. He expects imports to increase by nine percent compared to seven percent in the last fiscal year. He said the average rate of the Shekel will be 35 to the U.S. dollar.

ANGRY CRITICISM OF THE BUDGET

Although the government has yet to approve it, Aridor’s budget ran into angry criticism in the Knesset today from coalition and opposition MKs alike. Shlomo Lorincz, chairman of the Finance Committee, accused the Finance Minister of trying to impose his budget on other ministers and ram it through the Knesset without sufficient time for a thorough discussion.

The new fiscal year begins April 1. Lorincz said his committee would approve an interim budget so that the government can continue to function while the Knesset makes a detailed examination of Aridors proposals without the pressure of time.

Adi Amorai, of the Labor Alignment, denounced Aridor for priming the economy just before the Knesset elections last June. He charged that the government bought votes by raising price subsidies and reducing the cost of consumer goods to please the voters.

“Aridor now wants to save the money he was so generous with during the election year,” Amorai charged, observing that the main burden of his proposed cuts will fall on education and social services.

Geula Cohen of the Tehiya faction said that while the government can cut the defense budget this year, it will have to increase it considerably next year because of the withdrawal from Sinai.

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