For the first time since the establishment of the state, the Government of Israel is proposing a balanced budget, Dr. Dov Joseph, Minister for Trade and Industry, today told Parliament. Minister Joseph, interpreting the 168,450,000-pound budget in behalf of the government as the Knesset began consideration of the document, said that the attempt to balance the budget is an “important milestone in our economic consolidation.” He spoke in place of Eliezer Kaplan, Finance Minister, who is ill.
He stressed that the influence of a balanced budget would be felt not only within Israel but also abroad, where it is “bound to raise the value of our currency,” encourage Jews to invest in Israeli enterprises and “assist us in placing our economy on a sound basis and in the further development of the state.” The purpose of this budget, he added, is to break inflation and create conditions favorable to increased output and efficiency as well as to stabilize Israel’s currency.
Analyzing the almost 50 percent increase between this year’s and last year’s budgets, Dr. Joseph stressed that the income of the country had risen in the past year, but added that nevertheless there would be a small deficit–1,670,000 pounds–caused by a drop in tax income on one type of tobacco and by unforeseen developments connected with the internal national loan. He expressed the hope that the one percent deficit would be made up from the national loan itself.
He spoke of the new revenue expected from private incomes as well as from the new luxury and sales taxes, admitting that the increased direct taxes would be a heavy burden on the public. But, he insisted, “the government has the right to expect certain sacrifices and the public may be sure that the government will use the budget in the most economical manner.” He called upon the country to “maintain the dynamic character of our national economy simultaneously building it on a sound basis so as to make a greater contribution to the absorption of immigrants.”
DEBATE ON BUDGET TO START AFTER PURIM RECESS
After Dr. Joseph’s 50-minute presentation, the Knesset adjourned for its Purim recess. The festival will take place early next week. Today’s session was presided over by Joseph Sprinzak, Speaker of the House, who returned to duty after having been ill for a number of weeks.
Among the innovations introduced in this budget is the fact that for the first time in the four-year history of Israel, the government has introduced in advance a full year’s budget. Normally, the government asks for sums to cover its expenses for several months in advance. For the first time, too, the government has included security appropriations in the regular budget and will attempt to cover all its expenses, including the military, from income rather than by notes, bonds and the printing of new currency.
Increases in administrative and service expenses are 24 percent higher in this budget than in last year’s, and it is expected that this will be reflected in a further increase in prices. At the same time, subsidies for essential foodstuffs have been cut in half, with the government allocating only 2,500,000 pounds for this purpose. After the Knesset session a Ministry of Finance spokesman said the budget was “anti-inflationary,” although admitting that it will bring about rise in prices.
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