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January 12, 1979 - Image 15

Resource type:
The Detroit Jewish News, 1979-01-12

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Israel Treasury Prepares Economic Plan

The treasury is preparing a
new economic plan, de-
signed to soak some 10 bil-
lion pounds annually,
Yediot Aharonot's economic
correspondent reported
The main item in this new
anti-inflation measure may
be a five percent levy on in-
come tax. Other provisions
the plan calls for are cuts - in
the state budget. Cuts in
subsidies for various eco-
nomic enterprises, the sale
of public land, freezing pub-
lic construction, freezing
the number of government
employees, and linking
government finances
mortgages to the cost of liv-
ing index.
According to Yediot the
plan is still at its initial
stages, and it will probably
undergo several changes be-
fore it is finally approved.
However, its outline was al-
ready worked out, and it
indicates the policy the
treasury would like to pur-

Israel, Swazis
Sign Accord

Premier Maphevu Dhla-
mini of Swaziland and Pre-
mier Menahem Begin
signed a treaty of coopera-
tion providing for stepped-
up Israeli technological as-
sistance to the southern Af-
rican state, one of the few
black African countries that
did not sever its ties with
Israel after the Yom Kippur
The special effort made
here by the government of
Israel to fete Dhlamini and
his entourage of ministers
and officials during their
six-day state visit reflected,
observers said, 'Israel's
appreciation for Swazi-
land's independent stance
regarding Israel, and per-
haps, too, the hope that
some of the major black Af-
rican states will reconsider
their rupture of diplomatic
ties with Israel when the
peace treaty between Egypt
and Israel is signed.
At Ben-Gurion Airport,
where Begin accompanied
Dhlamini to say farewell,
the Swazi premier, who is
also his country's foreign
minister and army com-
mander, revealed that Is-
rael's Army Chief of Staff
Rafael Eitan had given him
-a full Israel paratroop-uni-
form as a gift, complete with
the famous red beret and
brown rubber-soled jump

sue in order to curb inflar
tion. The early publication
of the plan is understood to
serve as a trial balloon in
order to test public reaction
to the various proposals.
The most controversial
issue is the proposal to
impose a levy on income
tax. The treasury ex-
plains that the idea is not
to increase income tax as
such, but rather impose a
surtax on the existing
rates of income tax. In
other words, an income
tax payment of 1,000
pounds would now carry
an additional payment of
another 50 pounds.

This proposal may face
strong criticism from var-
ious circles. The previous
government announced
four years ago an income
tax reform which reduced
the marginal level of in-
come tax payments to a
maximum of 60 percent of
the gross income.
The idea behind the, tax
reform was to increase the
motivation for paying in-
come tax: The critics of the
proposal fear that by in-
creasing income tax — al-
though by a marginal rate
— the opposite effect may be
reached, and the paying of
taxes will increase even
further. The main spokes-
man of the opponents is re-
portedly Yezkel Flomin, de-
puty minister of finance. -
In reference of the Yediot,.
story, Finance Minister
Si_mha Ehrlich denied
Tuesday that he had any in-
tentions to raise direct
taxes. He said there were no
economic plans ready, and

he has not even studied any
working papers.
Meanwhile, Histadrut
and the Manufacturers
Association have
reached agreement on
the payment of up to IL
600 in January salaries as
partial compensation to
wage-earners for the re-
cent sharp rise in the cost
of living index.
Senior Histadrut official
Rehaviah Ofek, who
negotiated with the Man-
ufacturers Association,
made it clear that he and
the Manufacturers Associa-
tion which represents all
employers in the private
sector, expect the govern-
ment to endorse the agree-
ment and apply it to the
civil service and
government-owned indus-
try too.
The IL 600 payment will
comprise 10 percent of sal-
ary up to a ceiling of IL
6,000. Ofek explained that
this was a partial, tempbr-
ary measure to ease the ef-
fects of the galloping infla-
tion until the full cost of liv-
ing increment becomes due
for payment in April.

Histadrut had de-
manded that the payment
be advanced to January
following November
price increase statistics
and December proj-
ections which put infla-
tion for the calendar year
19'78 at more than 51 per-
The initial reaction from
the government and the
employers was negative.
But in the course of negotia-
tions, said Ofek, a general


consensus emerged that low
wage earners ought to be
compensated and low ceil-
ing (IL 6,000) was arrived

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Salomon Day

Gov. Hugh Carey pro-
claimed Jan. 6 a`s Haym
Salomon Day, marking the
193rd anniversary of the
death of the Ainerican pat-
riot and Revolutionary War
hero. In his proclamation,
Carey said: "Haym Salo-
mon's dedication to the
American cause exemplifies
the contributions made by__
the Jewish community to
the fight for liberty and in-

Friday, January 12, 1919 15

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