A draft budget totaling 2,357,000,000 pounds ($785,670,000) for 1962-63 was presented to the Knesset, Israel’s Parliament, today by Finance Minister Levi Eshkol. While the budget estimate for the coming fiscal year is 363,000,000 pounds ($121,000,000) more than this year’s, the bulk of the increase is due to the devaluation of Israel’s currency carried out two weeks ago.
A surplus of 40,000,000 pounds ($13,333,000), to be set aside to meet anticipated price increases, makes this the first surplus budget in Israel’s history.
In presenting the budget, Mr. Eshkol pointed out that the new dollar exchange rate in Israel will cost the Government 277,000,000 pounds more to pay for the foreign currency needed for the country’s security needs, capital goods and services and to pay capital and interest on foreign debts.
A feature of the new budget is the absence of export premiums which totaled 160,000,000 pounds ($53,333,000) in the previous year and which would have totaled 200,000,000 pounds next year if the new Government economic policy had not provided for the abolition of such payments, Mr. Eshkol stressed. The only subsidies to be maintained will be 35,000,000 pounds for vital edible products to keep such prices down.
Direct taxes will account for 43 percent of government income compared with 36 percent in the previous year’s budget. Indirect taxes, mainly from customs duties will be proportionately less in the coming year.
Expenditures under the new budget are: 410,000,000 pounds for security; 162,000,000 pounds for education; 73,500,000 pounds for health needs; 47,300,000 pounds for the Labor Ministry; 44,400,000 pounds for the police; 36,000,000 pounds for the Foreign Ministry; 31,800,000 pounds for the Social Welfare Ministry; 13,300,000 for the Agriculture Ministry; 9,500,000 pounds for the Justice Ministry; 6,400,000 pounds for the Religious Affairs Ministry and 4,000,000 pounds for tourism.
DEVELOPMENT BUDGET TOTALS 520,500,000 ISRAELI POUNDS
The Development budget, totaling 520,500,000 Israeli pounds ($173,500,000) included the following allocations, in the dollar equivalent: nearly $67,000,000 for housing; over $27,000,000 for agricultural projects; over $20,000,000 for the national water project; $38,000,000 for communications; $21,500,000 for industry and workshops; $14,500,000 for postal services; $4,100,000 for tourism and fairs; $6,000,000 for mines and quarries; $3,333,333 for electricity; and $4,333,333 for ports and harbors.
Predicting the outlook for the coming year, Mr. Eshkol forecast a 9 to 10 percent rise in the gross national output. The budget assumed immigration of several tens of thousands newcomers, and provided accordingly for immigrant housing. Mr. Eshkol also envisaged a “considerable” increase in agricultural yields.
Industrial exports are expected to grow more rapidly, Mr. Eshkol continued, while air and other transport services are to be made more profitable by the new exchange rate. Imports of capital, he predicted, will continue to be high, but he foresaw changes in the sources of these funds.
The Finance Minister expected German reparations to decrease, while the amounts of personal restitution and capital transferred by institutions will rise. He also predicted more private investments from abroad, as well as a rise in foreign currency balances. He expressed the hope that the rate of increase in prices, profits and wages will be limited.
The 1962-1963 allocations include 6,000,000 pounds ($2,000,000) for development of Arab and Druse villages under the five-year plan recently approved by the Cabinet. The money is earmarked for new classrooms, roads, water, electricity, agricultural expansion and the encouragement of industry and crafts.
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