Arnon Gafni, Governor of the Bank of Israel, unveiled his own plan to fight inflation. Appearing yesterday before the Knesset’s Finance Committee, he criticized the IL 304 billion budget proposed by Finance Minister Simcha Ehrlich as inflationary and urged that it be pared by IL 5 billion to reduce the rate of inflation by 10 percent.
The Cabinet failed Sunday to vote on Ehrlich’s budget. The vote was postponed until the next session at which time Premier Menachem Begin is expected to intervene. The most severe critic of Ehrilich was Yitzhak Modai, Minister of Energy and Infrastructure, who presented an alternative budget based largely on Gafni’s proposals. Gafni told the Finance Committee that if the budget isn’t cut, income taxes should be raised and the government should continue to slash its price support subsidies for basic food products and public transportation.
Ehrlich is known to favor a reduced budget in principle but maintains that his budget is the smallest possible under the present circumstances. He said after Sunday’s Cabinet meeting that he was still hopeful it would be approved intact for submission to the Knesset early next year. Most members of the Cabinet want reductions. But Yisrael Katz, the Minister for Social Betterment, warned yesterday that the cuts must not fall on the shoulders of the least affluent.
Begin has remained silent on the budget so far. But he complained today that the debate was being conducted in the public media and not confined to the Cabinet chamber.
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