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Sapir Presents Record Budget of $8.4 B; $3.5 B is for Defense

March 15, 1974
See Original Daily Bulletin From This Date

Finance Minister Pinhas Sapir presented the Knesset today with a record budget of IL 35.350 billion ($8.4 billion) of which IL 14.5 billion ($3.5 billion) is for defense. Although the defense portion of the new budget is IL 2 billion less than actual defense expenditures during the current fiscal year which included the Yom Kippur War, it is 2 1/2 times larger than the defense allocations in the original budget for fiscal 1973-74 which was planned before the war.

Sapir introduced the budget in a 90-minute speech during which he disclosed that last Oct. ber’s war had cost Israel $6.6 billion. He computed that coat, he said, on the basis of extra defense spending required by the war and losses in production and investments resulting from the conflict. Sapir said a large portion of the population would have to reduce its living standards this year to ease the nation’s economic difficulties. But he said the reduction would be moderate and suggested that most people would have to reduce their living standards only to the levels of 1972. Low-income families should be exempt from this burden, he said.

The Finance Minister said he did not expect an economic slowdown during the coming fiscal year, 1974-75. But the new budget includes an additional IL 400 million to stimulate the economy should that be necessary. He said that even since the war there had been a fair sharing of the economic burden. “The economy deserves a matriculation certificate,” he said.

Sapir said that his proposed budget would enable Israel to buy all the weapons and ammunition it needs “if they will only be sold to us.” He said it was expected that following a disengagement agreement on the Syrian front, the number of reserve soldiers on active duty will be cut. But he warned, “We have to prepare ourselves for the opposite possibility,” meaning a renewed flare-up of hostilities.

He said the new budget anticipated an influx of 55,000 new immigrants during the fiscal year it does not provide for increased social services but special efforts will be made to secure a minimum wage, housing for young couples and improved education, he said. Sapir stated that the income tax will rise slightly but the defense levy will be abolished for an overall saving of 13 percent to the taxpayer. The war loan imposed following the Yom Kippur War will continue to be deducted from wages, he said.

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