Finance Minister Pinhas Sapir told the Knesset, Israel’s Parliament, today, that the increased defense expenditures forced upon the country by the stepped-up pace of Arab armament was blocking Israel’s drive for economic independence.
Mr. Sapir commented on the increased defense appropriations in presenting to the Knesset the 1964-65 budget totaling 3,465,000,000 pounds ($1,155,000,000) which represents an 18.7 per cent increase over the previous year’s budget of 2,920,000,000 pounds ($973,000,000). The actual amount allocated for defense was not disclosed, but was included in an item designated as “security and special budgets.”
Mr. Sapir told the Knesset that the proposed budget aims at continuing the Government’s present economic policy, the preservation of stability, and the maintenance of current tax levels except for changes in the travel tax and the new capital gains tax. Expenditures in the draft budget are based on the assumption that the immigration rate will remain the same as the current year, he noted. He said also that the budget is based on the assumption that there will be no drastic wage increase and, in view of the pending demands and strike threats by various groups, this assumption will be put to the test over the next few months.
The increase of 545,000,000 pounds ($181,700,000) over the previous budget includes 241,000,000 pounds ($80,300,000) for “security and special budgets,” an item which now totals over a billion pounds or 32 per cent of the entire budget.
Other increases include 55,000,000 pounds ($18,300,000) for education, which now totals 225,000,000 pounds ($85,000,000); 30,000,000 pounds ($10,000,000) for health and social services, which total over 250,000,000 pounds ($83,000,000); 90,000,000 pounds ($30,000,000) for immigrant housing, which now totals 290,000,000 pounds ($96,300,000), part of which will be financed by various savings funds.
The budget item providing for repayment of debts and payment of interest totals 645,000,000 pounds ($215,000,000), and includes 100,000,000 pounds ($34,000,000) for the redemption of the Independence Bond issue.
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