ECONOMIC SURVEY
(COMMUNICATED BY GPO ECONOMICS DESK)
March 28, 1995
MACRO-ECONOMIC NEWS:
* CABINET APPROVES TAX CUTS.
On Sunday, 26.3.95, the Cabinet approved a Finance Ministry plan to cut
taxes by broadening both the 30% and 45% tax brackets. The tax breaks, for
the middle class, are part of a program to cut taxes by NIS 1.2 billion.
Under this new policy, to go into effect in September 1995, the ceiling
for the 30% bracket will be raised from NIS 6,080 to NIS 7,450 while the
top income in the 45% tax bracket will be raised from NIS 11,920 to NIS
13,500. Citizens earning less than NIS 6,500 will not be effected by the
new tax plan. According to Finance Minister Avraham Shohat, "In Israel,
taxes on the work and on salaried workers is very high. 80% of the taxes
are being paid by those earning between NIS 6,000-13,000 net. Shohat told
the Cabinet that the Finance Ministry was also planning to cut taxes in
1996 by NIS 1.2 billion, and by another NIS 1.2 billion in 1997.
Finance Ministry - Eli Yosef, 972-2-317201
PEACE ECONOMY:
* DELEGATION ARRIVES TO DETERMINE LOCATIONS AND FUNCTIONS OF REGIONAL
BUSINESS COUNCIL AND REGIONAL CHAMBER OF COMMERCE IN ACCORDANCE WITH
CASABLANCA CONFERENCE DECLARATION.
A delegation consisting of Deloitte Touche officials is in Israel this
week as part of a fact finding mission to determine the location of a
regional business council and a regional chamber of commerce. The
delegation is in Israel as part of the process of implementing decisions
made at the Casablanca Conference in October/November 1994. The delegation
is arriving after having visited Egypt and Jordan, and will meet with
Government officials and private sectors representatives.
Industry and Trade Ministry - Avital Bar, 972-2-220340
PRIVATIZATION:
* MINISTERIAL COMMITTEE FOR PRIVATIZATION CALLS FOR LIQUIDATION OF ISRAEL
SHIPYARDS FOLLOWING REFUSAL BY KNESSET FINANCE COMMITTEE TO APPROVE ITS
SALE.
Following the rejection of the sale of Israel Shipyards to SKO Car, a
private investment firm, by the Knesset Finance Committee on 27.3.95, the
Ministerial Committee on Privatization recommended that the company be
liquidated. With the Knesset committee's decision, workers who had
demonstrated at the company's gates in Haifa for over two weeks, began
dismantling their barricades. Workers' representatives announced that they
will fight any moves to liquidate the company.
NEWS:
* ELBIT AWARDED QUALITY IN INDUSTRY AWARD.
On 26.3.95, Prime Minister Rabin awarded the Quality in Industry Award to
Elbit, a Haifa-based firm with operations in a number of hi-tech areas.
Elbit was given the award due to the quality of its management techniques,
and the quality of its products and services. The PM also awarded a
Certificate of Merit to Telrad, producers of telecommunications equipment.
Telrad was awarded for the quality of its products.
Prime Minister's Media Advisor - Benny Cohen, 972-2-705555
* TAAS ISRAEL INDUSTRIES RECOVERY PLAN APPROVED BY CABINET.
TAAS Israel Industries (formerly Israel Military Industries) new recovery
plan was approved by the Cabinet on 26.3.95. The new plan includes the
firing of some 1,350 workers by the end of 1996, and the provision of $120
million in severance pay; the provision of $35 million in provisional
assistance; and the closing and consolidation of a number of TAAS plants.
Following the implementation of the new plan, an earlier recovery plan
which resulted in the laying off of approximately 2,500 workers, the
company will continue to employ approximately 3,500.
Finance Ministry - Eli Yosef, 972-2-317201
TOURISM:
* TWO SOUTH EAST ASIAN TOURISM GROUPS VISIT ISRAEL THIS WEEK.
ASEANTA, the umbrella organization for tourism in South East Asia, and a
group of 45 Malaysian tour agents are visiting Israel this week. ASEANTA,
consisting of tourism groups based in Singapore, Thailand, Malaysia,
Indonesia, the Philippines, and Brunei, is holding its annual Director's
meeting here this week. According to Tourism Minister Uzi Baram, these two
events show the growing interest on the part of tourism groups in Israel,
especially by Islamic pilgrims from Malaysia and Indonesia.
Tourism Ministry - Orly Doron, 972-2-754867
* INTERNATIONAL CONFERENCE ON DEAD SEA HEALTH TOURISM.
An international conference dedicated to health related tourism at the
Dead Sea, is being held tomorrow, Tuesday, 28.3.95, at the Ganei Moriah
Hotel at the Dead Sea. Approximately 80 delegates from abroad, including
health care specialists, will participate.
Tourism Ministry - Orly Doron, 972-2-754867
DELEGATIONS:
* HEWLETT PACKARD PRESIDENT VISITING ISRAEL THIS WEEK.
Lewis Platt, President of the hi-tech multinational corporation Hewlett
Packard, and a delegation of company executives will arrive in Israel
tomorrow, Tuesday, 28.3.95. During his visit, Platt will meet with the
Prime Minister and a number of other ministers as well as visit a number
of hi-tech industries.
Industry and Trade Ministry - Noah Shani, 972-2-220601
* EUROPEAN INVESTMENT BANK DELEGATION HERE FOR TALKS.
A delegation of senior officials from the European Investment Bank, part
of the European Union, are in Israel holding a series of meetings with
Government officials and private sector leaders. Officials in the
delegation said the bank is considering funding a joint Israel-Egypt oil
refinery to be built in Alexandria. Since 1981, the EIB has invested
approximately ECU 200 million in Israel, with approximately ECU 82 million
more to be dispersed between 1992-96. The EIB is also a partner with the
World Bank in the Mediterranean Technical Assistance Program, which helps
countries in the region identify sources of environmental damage. Israel
has been the subject of two studies by the program: a toxic waste disposal
study and a study of pollution in the Kishon River.
European Union in Israel Economic Counselor, 972-3-6964166