The Knesset passed on the first reading today the national budget for the 1973 fiscal year by a vote of 48-18. The budget, submitted by Finance Minister Pinhas Sapir, totals nearly $3.81 billion. In ending a mammoth debate in the Knesset, Sapir warned both management and labor of the urgency of maintaining price stability. He said the wage policy approved by both sides had made it possible to absorb a rise in manufacturing costs without bringing about a considerable rise in prices.
Sapir added that if employers “dragged the economy” into a wave of price increases, they would be “cutting off the branch on which they sit.” He said Israel’s workers would not tolerate any dilution of their purchasing power and would demand compensation for any price boosts, leaving the road open to inflation. He added that if this did happen, the government would be forced to take “drastic steps.”
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