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Cabinet Okays New Economic Steps

February 9, 1979
See Original Daily Bulletin From This Date

The Cabinet gave its approval today to Finance Minister Simcha Ehrlich’s proposals for inflation control. (See Feb. 5 News Bulletin.) After a two-session debate, the ministers gave virtually unanimous consent to the proposals. Only Energy Minister Yitzhak Modai, Ehrlich’s openly declared rival for the finance ministership and for the leadership of the Liberal Party, abstained.

Two ministers suggested tougher measures during the course of the discussion. Transport Minister Haim Landau wanted a reimposition of travel tax, which Ehrlich abolished soon after the Begin government took office Agriculture Minister Ariel Sharon wanted a raise in income tax. Ehrlich urged the Cabinet majority to turn down both of those proposals — which it did.

Ehrlich had told television viewers last night that he and his aides believed that honest, taxpaying citizens were being squeezed hard enough by the government and he would not, therefore, suggest new taxes or ###ies.Three other proposals from ministers were treated less cavalierly by Ehrlich — but were also not adopted by the Cabinet as part of the latest economic program. Justice Minister Shmuel Tamir stressed the need to channel investments to rental housing. Religious Affairs Minister Aharon Abo Hatzeira pressed for tighter price controls, arguing that merchants and shopkeepers were making too great a profit. Health Minister Eliezer Shostak proposed reduction of purchase taxes so as to generate an atmosphere of falling prices.

Many of the ministers who spoke today emphasized the crisis proportions of Israel’s housing problems — especially for young couples and others starting up from scratch. The Cabinet decided to hold a separate, urgent debate devoted solely and entirely to housing problems. At this debate Housing Minister David Levy’s mortgage plans for young couples will be discussed. Levy is proposing large mortgages, linked to the cost-of-living index and comprising a fixed proportion of the average national wage, repayable over 20 years.

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