A New Battle Over Resources in Israel
Posted on Apr 28, 2011
The campaign against Sheshinski was the work of the oil lobby and die-hard supporters of the far-right Yisrael Beiteinu party as well as key members of the Likud Party. The lobby has blocked changes to the 1952 Oil Law twice over the last 10 years, and opponents of the law have argued that because the gas has already been discovered, the rules cannot be changed “retroactively.” The ploy was too transparent to succeed, but the campaign did soften the law with a significant loophole.
Hours before the vote, the Knesset finance committee revised the bill to except the minister of infrastructure, Yisrael Beiteinu’s Uzi Landau, from having to report data on gas finds to tax authorities. Landau had shown his true colors earlier in the debate by saying Lebanon risked a war with Israel for trying to claim gas reserves in its territorial waters.
Shir Hever, an economist with the Alternative Information Center, has no doubt that Landau will help the gas companies avoid the full brunt of the new taxes by hiding the extent of the reserves exploited.
“It would be naive to assume that the companies will volunteer to pay the full amount when they can easily give distorted reports,” he said. “If it comes to court, the companies can always claim that it’s a matter of interpretation and not willful concealment of information.”
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“Suddenly, calling for more resources for the state through taxation of capitalists is considered ‘not patriotic,’ as if the capitalists are the ‘real’ Israel.”
But for now, those behind Sheshinski’s recommendation remain optimistic.
Meimad’s Melchior said much of the income will be put in a national fund to be used to enact “sweeping economic and social reforms,” adding that Israelis had long agreed that such spending was necessary. “But they’ve said in the past that we have to pay money for security and defense, and we don’t have resources ... but now we’ll have [heavy funding] over a long period.”
Melchior looks to the Norway model, in which the interest from a fund containing the country’s vast petroleum income pays for its vaunted social welfare programs. Melchior and the forum want to have the money in Israel pay for better education, health, welfare, senior benefits, housing, environmental protection and public transit, as well as for programs dedicated to bringing full equality to the country’s Palestinian Arab citizens.
Though critics claim the law doesn’t go far enough (the forum had advocated that 80 percent of profits go to the state), and the financial committee was able to corrupt the bill with the Landau loophole, it is not impossible that funds provided by the new tax policy could help close socioeconomic gaps if used properly.
The hope is that the movement does not quiet down. It will be up to activists to avoid a repeat of the outcome of the March social workers’ strike, which ended without major gains being made by the workers.
“We started the Israel Civic Action Forum 11 months ago so there would be no shady deals in closed dark rooms—the whole public would be there,” said Rabbi Melchior. “We will continue to follow this, every step of the way; nobody’s going to get away with not doing their obligations.”
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