Israel moves to cut galloping inflation

Press, Volume CXIV, Issue 33577, 4 July 1974, Page 15

Israel moves to cut galloping inflation

(N.Z.P.A.-Reuter—Copyright)

JERUSALEM, July 3.

Israel has announced a sweeping range of economy measures designed to slow down its galloping inflation, narrow the export* import gap, and raise funds for its enormous defence spending.

The decision came at a special late-night Cabinet session held after the return

of the Prime Minister (Mr Yitzhak Rabin) from the Socialist International conference in London. The Finance Minister (Mr Yehoshiia Rabinowitz), announcing the new tax and economy moves, sajd that a sharp cutback in building would be made. No public buildings and no large private apartment blocks would be started during the next six months.

But he promised that certain key projects, such as housing for new immigrants and young couples, would receive top priority despite the cutback.

Included in the new measures is a 10 per cent “military procurement” surcharge on imports, making a total imports surcharge of 35 per cent.

In an effort to encourage manufacturers to produce for the foreign rather than the local market, exporters will receive a 10 per cent incentive payment. Another "military procurement” tax of 5 per cent is to be imposed on property and private cars, but it need only be paid over a threeyear period. Families with only one home or apartment are to be exempt from the tax.

Additional luxury taxes are being imposed on electric refrigerators, washing machines, cosmetics and similar goods.