Israel Approves $23-Billion Budget; Cuts Across the Board

The Israeli Parliament approved a $23-billion budget for 1985-1986 Friday, slicing $1.8 billion from last year’s spending.

The final vote was 60-4 with the only opposition in the 120-member Knesset coming from the Front for Peace and Equality, a Communist party, and the secretary general of the Histadrut trade union federation, Yisrael Kessar.

The spending cuts were made across the board, affecting all ministries and government subsidies to fuel and basic food items. Defense spending, which usually accounts for about one-third of the budget, was sliced by $250 million.

The United States has been pressing the Israeli government to take strong steps to reduce its inflation, which last year ran about 400%, as a precondition for granting emergency economic aid. Israel is seeking $800 million in addition to the $2.6 billion already granted by the United States.

Last year’s approved budget was also $23 billion, but the government overspent and retroactively approved a supplementary budget of $1.8 billion.

Meanwhile, the price of gasoline in Israel rose overnight by 13%, bringing the price for a gallon of gasoline from $2.63 to $2.97. The increase was in line with the policy of adjusting the prices of fuel to costs, the Energy Ministry announced.

Israel’s fiscal year starts April 1. The parliamentary approval, with just two days to spare, followed several days of wrangling over allocations to religious institutions.