Israel lawmakers will approve 2023 state budget despite govt's lack of majority, Fin Min says

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Israeli Finance Minister Avigdor Lieberman speaks during the weekly cabinet meeting at the prime minister's office in Jerusalem February 13, 2022. Menahem Kahana/Pool via REUTERS

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JERUSALEM, May 24 (Reuters) - Israel's Finance Minister said he expects lawmakers to approve the 2023 state budget by the end of the year despite the ruling coalition lacking a majority.

In an interview with Reuters, Avidgor Lieberman said there would not be changes to taxation in the budget, although there will be big investments in Israel's technology sector.

He also expressed concern over rising inflation as a threat to Israel's economy and backs Bank of Israel rate hikes as one measure to contain prices.

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The budget, Lieberman said, should be approved by cabinet ministers around June 23, with parliament giving its initial nod by late July. Following a summer recess and Jewish holidays in late September to mid-October, the budget should receive final approval in November, he said.

One potential stumbling block is that Prime Minister Naftali Bennett controls just 60 of parliament's 120 seats after a lawmaker from his nationalist party quit last month. read more

"We don't need an absolute majority and I think the 60 we have is enough," Lieberman said. "No doubt we will pass the budget ... Everyone (in the coalition) understands it is in their best interest to pass a budget."

The former government led by Benjamin Netanyahu fell a year ago partly due to the failure to approve a 2021-2022 budget. If the 2023 budget is not approved by March 31, new elections are triggered.

Lieberman doubted there would be new elections anytime soon, citing political reasons, and would not give in to any demands for extra funds by lawmakers to keep the coalition in tact. He said he had no intention to divert from responsible fiscal policies that have helped to bring the budget deficit to below 1% of gross domestic product and the debt to GDP ratio back below 70%.

"I don't believe in populist steps. I believe in a responsible, free, liberal economy," the minister said.

Giving few specifics on the makeup of the 2023 budget, Lieberman said there will not be any tax hikes or cuts but there will be significant investments in research and development to further bolster the high-tech sector -- a key growth driver -- and in infrastructure.

"It's crucial to understand that the future is in technology," he said. "Our advantage is not the size of the country or population but our brains."

The state, he added, will also invest in education, especially in ultra-Orthodox Jewish schools, to bring more ultra-Orthodox men into the tech job market.

Israel's economy grew 8.2% in 2021 and is forecast to grow 5.5% in 2022. Robust inflation is the biggest economic threat. The inflation rate stands at 4%, lower than most Western countries.

Lieberman fully backed Monday's 0.4 percentage point interest rate increase by the Bank of Israel and said that from the government's standpoint, the main way to contain inflation was through more imports. read more

Lieberman's planned reform to boost agriculture imports has taken time to get approval from "socialist" lawmakers trying to protect local producers, he said, adding he expects that the measures will eventually pass.

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Reporting by Steven Scheer Editing by Alexandra Hudson

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