ISRAELI PARLIAMENT PASSES NEW BUDGET
Israel's parliament passed a 25
billion dollar state budget that lowers the taxes of highest
wage earners in an effort to stimulate worker productivity,
State Radio said.
    Israelis are one of the most heavily taxed people in the
world. Under the new budget, about a quarter of which will go
to defence, highest wage earners will pay income tax of 48 per
cent instead of the current 60 per cent.
    The bill passed less than an hour before the start of the
new fiscal year on April 1. It was held up by debates over
specific programs such as education fees and social benefits
for low wage earners.
    The radio said the budget passed by a wide majority. Last
year's budget was about 19 billion dollars.
    In January, Israel devalued its shekel currency by 9.75 per
cent against the U.S. Dollar and the government agreed to lower
taxes of high wage-earners in an effort to stimulate exports
and productivity.
    The government, trade unions and industrialists in January
also agreed to extend 18-month-old price controls until March
1988 in an effort to avert labour unrest and a return to hyper-
inflation. Because of the controls, inflation dropped to 20 per
cent in 1986 from more than 400 per cent in 1985.
 Reuter
