Knesset Denounced by Policymakers for $1 Billion Housing Decision

Two of the country’s leading economic policymakers have taken sharp issue with the government over its decision to spend more than $1 billion outside the regular budget for imported housing.

Professor Michael Bruno, governor of the Bank of Israel, the country’s central bank, said the measure would open the way to “disaster.”

Ya’acov Lifshitz, the Treasury’s director general, predicted that the government would have a hard time finding the extra billion dollars.

Both officials, agreed with Finance Minister Yitzhak Moda’i, who fought a tough but losing battle against the extra expenditure for imported prefabricated housing, an expense he called inflationary and capable of crippling the economy.

Moda’i and three colleagues nearly precipitated the downfall of the Likud-led government Thursday when they absented themselves from the Knesset during the vote for a supplementary budget.

A government loss on the issue would have been interpreted as a no-confidence vote. The Augusta Yisrael faction, nominally part of the opposition, raised its hands to save Prime Minister Yitzhak Shamir’s regime.

The incident demonstrated Moda’i’s cold anger over the government’s decision to import the housing “without consulting him.”

DETERMINED TO SOLVE CRISES

The episode was the latest in the Treasury’s running battle with Housing Minister Ariel Sharon, who is determined to solve Israel’s housing crisis as swiftly as possible, regardless of cost.

Warning that the housing shortage could end aliyah from the Soviet Union and stir social unrest in Israel, Sharon demanded a crash program.

Instead, Sharon proposed importing tens of thousands of prefabricated houses and mobile homes over the next two years. But the $3 billion price tag was too daunt-

Shamir proposed a compromise, which the Cabinet, except Moda’i, agreed to Thursday.

It calls for the import of 5,000 mobile homes for $75 million and another $180 million for 9,000 prefabricated homes.

According to the Treasury, an additional budget of $1.25 billion would be required.

Moda’i attempted to block it in the Knesset with the help of three colleagues from Likud’s Liberal Party wing. They defected from Likud early this year to form an independent Knesset faction, but returned to the fold in time to enable Shamir to put together a governing coalition with the right-wing and religious parties.

Although Moda’i holds a prestigious and influential portfolio, he no longer enjoys high status in the Likud leadership as a result of that political gamble.

But he may very well be right on the issue of the housing budget, according to Dov Genihovsky, an economic analyst writing Sunday in Yediot Achronot.

“The compromise over the import of houses was a mistake in any case,” Genihovsky said.

“If Sharon is right, the government decided on too few houses. If Moda’i is right, then there are too many.”