A Cabinet crisis was averted today as a result of a temporary compromise reached between the Mapai and General Zionists on the government budget which is to be proposed to Parliament for approval.
The General Zionists threatened to vote against the budget and thus force the downfall of the coalition Cabinet heeded by Prime Minister Moshe Sharett, who is a Mapai leader. They demanded that the proposed budget, prepared by Finance Minister Levi Eshkol, also a Mapai leader, should be reduced. They requested, particularly, that the income tax be reduced by approximately 8,500,000 pounds.
The Mapai members of the Cabinet, insisting on adoption of the budget as proposed by the Minister of Finance, argued that reduction of the income tax would create and belonging to the religious groups and to the Progressive Party mediated between the Mapai and General Zionists and brought about the compromise.
REFORMS IN INCOME TAX PROMISED; BUDGET IS CUT
At the end of today’s Cabinet meeting at which a final decision had to be taken, Mr. Sharett announced to anxiously waiting correspondents that “there is no crisis as yet.” At the same time, Minister of Communication Joseph Saphir, a General Zionist, told newsmen that the Mapai members of the Cabinet had agreed to reduce the budget by 2, 500,000 pounds and that that Cabinet had decided on reforms in the income tax which will result in further tax reductions.
Despite the fact that the Mapai agreed to make concessions, it became known that the General Zionist Ministers voted at the Cabinet session today against the budget proposed by Mr. Eshkol. They explained that the decision actually lies in the hands of the national council of their party, which will rule within a few days whether the General Zionist deputies in Parliament will support the budget when it is presented for approval.
Prior to today’s meeting of the Cabinet, Mr. Eshkol and Mr. Saphir met to explore the possibilities of a compromise. The compromise amendment was introduced later at the meeting by the Progressive member Dr. Pinchas Rosen, Minister of Justice, and was accepted by the Mapai Ministers. The General Zionists declared that the were not satisfied with it, but had nevertheless agreed not to break up the Cabinet “yet.”
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