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Israel cabinet to vote on 2021-2022 budget in early August: Finance Minister

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By Reuters
Israel cabinet to vote on 2021-2022 budget in early August: Finance Minister
Israel cabinet to vote on 2021-2022 budget in early August: Finance Minister   -   Copyright  Thomson Reuters 2021
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By Steven Scheer

JERUSALEM – Israel Finance Minister Avigdor Lieberman said on Tuesday he aimed to present the 2021-2022 state budget draft to cabinet ministers for a vote in the first week of August.

Parliament would then hold its preliminary vote on the budget in September with final parliamentary approval for the 14-month spending package expected in the first half of November, he told a news conference.

Lieberman, who took office last month and has vowed to boost employment levels, said he had not yet set budget deficit targets for 2021 or 2022. But when asked about the Bank of Israel’s deficit estimate of 7.1% of gross domestic product for this year, he said: “It’s not too optimistic.”

After a deficit of 11.6% of GDP in 2020 due to heavy spending linked to the coronavirus pandemic, the deficit eased to 10.1% by June, which Lieberman said was “not bad”.

Israel is using a pro-rated version of the 2019 budget that was approved in March 2018. Two years of political stalemate and four elections culminated in the formation of a new government led by former tech executive Naftali Bennett in June, unseating Benjamin Netanyahu after 12 years of premiership.

Despite a razor-thin majority in parliament for the new coalition and Netanyahu aggressively leading the opposition, Lieberman said he was “almost fully confident” there would be a budget by November. “No one, even among opposition parties, wants to go to a fifth election,” he said.

Lieberman reiterated that he would not raise the structural budget deficit, though he has pledged not to increase most taxes or make big budget cuts. There is a plan to levy a congestion tax on drivers in Tel Aviv to encourage use of public transport, though it would still need transport ministry approval.

The deficit, he said, would be reined in by economic growth, efficiency and productivity.

“I didn’t come here to please anyone…,” he said. “We will do whatever is best for Israel’s economy, even if it is not popular.”

Following a vaccination drive in which some 55% of Israel’s population has now been inoculated, the economy is expected to rebound, growing by 5.5% in 2021 and 6% in 2022.

Lieberman said it was his ambition for the economy to grow 5% a year in the coming four years.