The full financial cost to Israel of the October War became clear in the Israeli Parliament, The Knesset on Monday (January 28) when Finance Minister Pinnas Sapir presented a supplementary budget which raises defence spending to 50 per cent of the national budget for the financial year ending in April 1974.
GV EXT Knesset (mute)
SV finance Minsiter Pihhas Sapir at rostrum and begins to speak in Hebrew
SV Golda Meir seated as speech continues
GV Floor of Knesset and Pan to Minsiter speaking on rostrum
CU Minister finishing speech
CUe Newspaper headline on 4 per cent coat of living increase Pull back over shoulder of reader
SV INT Supermarket man stamping prices on products
GV & PAN Products on shelf
GV Women looking at products at Cabinet
GV Women queseing at till
CU Till registering Prices (meat)
Initials SC/1619 SC/1701
Script is copyright Reuters Limited. All rights reserved
Background: The full financial cost to Israel of the October War became clear in the Israeli Parliament, The Knesset on Monday (January 28) when Finance Minister Pinnas Sapir presented a supplementary budget which raises defence spending to 50 per cent of the national budget for the financial year ending in April 1974. Before the war defence accounted for 30 per cent of budgetary apending.
Mr. Sapir tabled the 1,200 million sterling supplementary budget and explained that 90 percent of the additional funds were needed for defence purposes.
The GBP 1,200 million represents an increase of 60 per cent on the original GBP 2,000 million budget.
The effect on the Israeli public was immediate. For on Tuesday evening the Government announced it was cutting by half the subsidies on basic food commodities. Food such as eggs, rice, bread, butter, margarine, sugar, milk and cheese are up in price by between 40 and 80 per cent. Subesdised passenger fares are also to go up by 50 per cent.
As the Governhemtn has already recommended only a four per cent cost-of-living increment, Israelis will have to tighten their belts.
Israeli trade unions have shown no sign of abandoning the automatic link between wages and the cost of living. As prices rose sharply last year before this weeks rises, Histadrut, the Israeli trade union federation, is insisting on a 15 per cent cost-of-living increment from January 1.