Sinai Developments Force Israel to Curtail Development Projects

Political and military developments of the last few weeks have forced the curtailment of certain development projects as funds budgeted for them have been diverted to new programs. Although official figures have not been released yet, it is estimated that the cut in the development budget will amount to about seven percent.

It is expected that the 20,000,000 pounds thus saved from development projects will be added to the added budget to be submitted to Parliament next week. This budget is chiefly designed to cover security expenditures and to increase stockpiles of foodstuffs and raw materials and possible to pay in part for the oil pipeline from Elath.

Levi Eshkol, Israel’s Finance Minister, will introduce in Parliament a special 75,000,000 pound deficit budget to cover further costs of the Israel operation in the Sinai, he revealed at a press conference here. The Finance Minister expressed doubt that the Jewish Agency could continue its single-handed financing of absorption of new immigrants in view of the new wave of refugees from Egypt. The government, he continued, will have to help meet the costs of absorption.

Mr. Eshkol disclosed that the budget for the next fiscal year, on which his office is already at work, will amount to about 900,000,000 pounds. The budget will be presented to the Knesset either late this month or early in January.

Isaac Bar Yehuda, Minister of the Interior, announced today that his Achdut Avoda Party would fight the new income tax scheduled which will be proposed in Parliament. While the situation is far from a Cabinet crisis, Mr. Bar Yehuda bluntly warned that the Achdut Avoda, which is left of the Mapam and right of the Mapam, would fight the tax measure “both inside the coalition and in the Knesset.” The party, which is challenging the second government tax measure in recent weeks, wants higher rates for middle and high income taxpayers.