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Knesset Expected to Adopt Budget, Despite Big Cuts

Finance Minister Moshe Nissim’s $33.5 billion state budget for fiscal 1988, submitted Tuesday to the Knesset seems assured of swift passage despite some $494.5 million of cuts in government expenditures that could cause hardships this election year.

Both the Labor Party and the Likud have pledged not to support any amendments that could disfigure Nissim’s fiscal package. Nissim said he was confident there would be no “election economics,” warning that the electorate would have to “pay dearly” for any deviations.

Nissim indicated, in fact, that still more pruning of government spending is envisaged for 1989. He said this year’s cuts might have been deeper, but his ministry considered that “impractical” given the present “non-crisis atmosphere” in the economy.

The finance minister hailed the achievement of relative stability in the nation’s economy. “But we are still at the very beginning of the road to economic health and recovery,” he cautioned. He expressed concern that almost half the budget is earmarked to service and repay debts at home and abroad.

The projected cuts will be felt later this year, mainly in the form of sharp increases in the prices of government-subsidized items, such as flour and public transportation.

There will be an extension of cutbacks, in force since 1985, on national insurance payments for children in middle-income families. Plans to introduce free kindergarten for children aged 3 and 4 have been postponed.

The only area where the budget has been increased somewhat is road construction. Improvement of Israel’s highways is considered urgent because of the high rate of traffic fatalities, perhaps the highest per capita in the world.

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