Israel parliament approves 2015-16 budget draft in first vote

JERUSALEM (Reuters) - Israel's parliament gave its initial nod to the state's budget draft for 2015-16 late on Wednesday, after a marathon session that included heavy resistance from opposition lawmakers, with 57 voting in favour and 53 against. The budget next heads to parliament's finance committee, where it could undergo changes. The government hopes to get final parliamentary approval by Nov. 19 for the 13-month plan, which covers December 2015 though 2016. Initial passage of the budget, while expected, represents a big win for new Finance Minister Moshe Kahlon and Prime Minister Benjamin Netanyahu, who has suffered a number of recent setbacks, including delays in forging a deal to develop a large natural gas well. Netanyahu leads a five-party coalition that came to power after elections in March. He holds 61 of the 120 seats in parliament, putting any legislative vote on a knife's edge. The cabinet last month approved the budget plan, with Netanyahu rebuking ministers for seeking more funds at the expense of fiscal responsibility and economic growth. Speaking to lawmakers before the vote, Kahlon said the budget plan was more responsible than his predecessor's, since it has a lower budget deficit target of 2.9 percent of gross domestic product next year. To encourage economic growth, no tax increases are planned. The government forecasts growth of 3.1 percent this year and 3.3 percent in 2016, but the economy has grown more slowly than expected in the first half of the year. The Bank of Israel was seeking a deficit target of no more than 2.5 percent of GDP and higher tax income. Kahlon noted that since tax revenues were higher than expected, the excess would be given back to the public. Similarly, the finance ministry's director-general earlier on Wednesday said the state would consider cuts to the value- added tax and to other taxes should the trend of positive tax revenue continue. Israel is operating on the base of the 2014 budget in the absence of a spending plan for 2015. (The story has been refiled to fix dateline.) (Reporting by Steven Scheer and Ori Lewis, editing by Larry King)