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Opposition to New Austerity Budget

Premier Shimon Peres, lobbying hard for the new austerity budget that will go before the Knesset Monday, has run into opposition from some members of his own Labor Party faction. A meeting of the faction executive Thursday afternoon ended with no binding commitment of support despite Peres’ warning that coalition defections could spell the end of the unity government.

Some Labor MKs said they would vote for the budget on the understanding that Peres will persuade the Treasury to cancel measures they find objectionable. The latter include an education tax and a tax on old age pensions whose recipients have additional sources of income. The Labor dissenters propose that the government levy a new tax on large homes and increase the taxes on senior business executives who drive company cars.