Finance Minister Levi-Eshkol presented Parliament today with a budget of 775,300,000 pounds for the 1956-57 fiscal year, the largest budget to date. At the same time, he warned the deputies that he would shortly have another budget for their approval, a special 50,000,000 pound defense budget.
Despite the fact that the new budget is 3. 7 per cent higher than last years, Mr. Eshkol pledged that there would be no increase in taxation, neither direct nor indirect. He said that the extra income would come from the 37,500 immigrants who swelled Israel’s population during the past year. He was also looking into means of reducing taxes for families with many children, he reported.
In the picture of Israel’s economy which he drew for the Knesset, Mr. Eshkol foresaw no price rises in the coming year and said that last year the government was able to keep price rises to five percent the smallest increase in Israel’s history. The national income rose 12 percent last year to 1,750,000,000 pounds and investment rose by 34 percent to 600,000,000 pounds. Employment rose by seven percent, the population increased–by births over deaths and by immigration–by 71,300, or 4. 2 percent.
Foreign currency-reserves, upon which Israel’s currency is based, remained at the same level as in 1954, despite a continued unfavorable balance of trade, the Finance Minister reported. Imports stood at $433,000,000, while exports were at $139,000,000. Industrial production rose by 12 percent and the productivity of workers increased by 4, 5, percent. Total industrial plant increased in value by $3,000,000, reaching a total of $22,000,000, and 40 new industrial enterprises were founded with investments of 5,500,000 pounds and $4,000,000 while expansion of old plants added investments of 1,500,000 pounds and $1,000,000.
Agricultural production rose 3,5 percent last year, chiefly due to the extension of irrigation to another 130,000 dunams (42,500 acres) of land. The greatest progress in the agricultural field was chalked up in industrial crops, whose value last year was 21,000,000 pounds–an increase of 50 percent. Cotton crops this year amounted to 5,750,000 pounds in value, which saved Israel some $2,500,000 in foreign currency. Next year Israel will probably be using only locally grown cotton.
Mr. Eshkol told the House that he expects to submit an anti-cartel law to it in the near future. He stressed that the government will strive to increase exports by encouraging industries producing for export. He pledged the government to continue its fight against, inflation and the continuation of efforts to develop the natural resources of the country, as well as its industry.
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