Israel approves new budget with focus on narrowing social gaps

Israeli parliament on Thursday approved the state's nearly 1 trillion-shekel (about 262 billion U.S. dollars) budget for 2017 and 2018 after an overnight marathon session.

The biennial budget was approved by a majority of 60 supporters versus 48 opponents.

Finance Minister Moshe Kahlon said that the budget would reduce the cost of living, cut the skyrocketing housing prices, and boost growth.

"The budget is a social one," he said in a statement. "It is a budget that helps the entire population. It reduces social gaps, increases public spending, cuts taxes and emphasizes social ministries," he said.

Kahlon said that his strategy, which includes a new tax on the ownership of a third apartment, would reduce the demands for new apartments and cut the housing prices, which doubled since 2007.

The budget stipulates an economic growth of about 3 percent in 2016, which will increase to 3.5 percent in 2017. The rate of unemployment will continue to be low at 4.5 percent.

Corporate tax will be reduced gradually from 25 percent to 24 percent in 2017 and 23 percent in 2018.

The largest spending in the budget remained the expenditures on security, with an allocation of 70 billion shekels (about 18 billion dollars) each year.

Prime Minister Benjamin Netanyahu established the two-year budget last year as a mean to secure the stability of his six-party coalition. Endit