Finance Minister Levi Eshkol submitted to Israel’s Parliament today a budget for the fiscal year, beginning April 1, totaling 1, 574, 000, 000 Israeli pounds ($874,450,000). Of this amount, 532, 000, 000 pounds ($295, 500, 000) represents a special development budget.
The 134, 000, 000-pound ($75, 040, 000) increase in the budget, compared with the last, will provide, Mr. Eshkol explained, for increased expenditures for defense, social obligations and higher subsidies.
Mr. Eshkol told the Knesset that Israel’s exports last year increased 24 percent against an increase of only four percent in imports, thus reducing the foreign trade gap by $35, 000, 000–a reduction of 10 percent. He warned, however, that 1959 was a year of favorable situations which may not necessarily be repeated this year. Israel will therefore have to make a greater production and export effort, he said, reduce imports. reduce consumption and also produce a more selective investment policy.
In his forecast for 1960, the Finance Minister said that Israeli exports would increase by some $50-60, 000, 000 to a total of $350, 000, 000, while imports for consumption increased by only $5, 000, 000. He pointed out, however, that Israel would have an expenditure of $36, 000, 000 for the acquisition of new ships.
He said imports might be increased by $60, 000, 000 half of which would go into stockpiling. Exports, he said, would cover 52 percent of imports, compared with 50 percent in the past year. He forecast industrial production increased by ten percent; agriculture, six to eight percent; and total national production, eight to nine percent, compared with 12 percent in 1959.
He said that all this indicated a slowdown in the rate of expansion of Israel’s economy in the next year, and stressed that only expansion of exports could make increased production possible.
260, 000, 000 POUNDS MARKED FOR DEFENSE; 532, 000, 000 FOR DEVELOPMENT
Expenditures of the Defense Ministry are listed in the new budget at 260, 000, 000 pounds ($144, 500, 000)–about 26 percent of the regular budget and about 9,000,000 pounds more than last year’s figure. This, presumably, is not the total defense outlay planned and, as in past years, part of the defense budget is secret and incorporated under other headings.
Of the 532, 000, 000 pounds for development, only 367, 000, 000 pounds will be available for new investments. The remainder is for debt service and for loans for operating capital on new enterprises.
In 1959, Mr. Eshkol reported, Israel exports covered 50 percent of imports, compared with a total of 42 percent in the previous year. National production increased by 12 percent to a total of 4, 000, 000, 000 pounds ($2, 222, 225, 000). Agricultural production increased 16 percent; manufacturing, 14 percent; personal income, 11 percent; and per capita consumption increased seven to eight percent, while productivity per capita grew only five to six percent.
The new budget includes an allocation for carrying out a new national water scheme. Included also are a 40, 000, 000-pound loan to the Jewish Agency for new settlements; allocation to industry, to be devoted mainly to the establishment of new undertakings and the expansion of elder enterprises; and a 35,000,000-pound investment for the development of electricity output.
Other items included are the completion of expansion work in the Port of Haifa; port improvements at Eilat; continuing development of the new port of Ashdod; the purchase of new merchant shipping; shipyard construction; and the enlargement of the Lydda Airport so that jet aircraft may be handled there.
FURTHER RELEGATION OF FOREIGN CURRENCY CONTROLS PLANNED
Mr. Eskhol told the Knesset of plans for further relaxation of foreign currency controls, announcing new measures to encourage transfers of foreign currency to Israel. Under the new regulations, every foreign resident, in addition to tourists, will be given 20 percent premium for foreign currency. Settlers will be exempt for 10 years from the obligation to sell their foreign currency to the Treasury.
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