At a session of the Knesset Finance Committee today, an agreement was reached whereby the Jewish National Fund (JNF) will transfer NIS 1 billion to the state in 2018 and a further NIS 1 billion in 2019. This is in addition to the NIS 2.2 billion transferred under a past agreement.
The Finance Committee session attracted a great deal of attention, and was attended by senior government officials, among them Prime Minister Benjamin Netanyahu's chief of staff Yoav Horowitz and Ministry of Finance director general Shai Babad, as well as by JNF chairman Daniel (Danny) Atar and coalition chairman David Bitan. The eventual agreement was reached by Atar and Babad, through Bitan's mediation.
The bill whereby the JNF was to transfer to the state 65% of its annual profits on land betterment was passed on first reading as a chapter of the Economic Arrangements Law a year ago, but was split off from the law. Today, the chapter in question (chapter 7) was on the agenda of the Knesset Finance Committee, to be prepared for second and third readings.
As mentioned, the bill obliges the JNF to transfer 65% of its land profits to the state annually. Should the JNF refuse, its tax exemption will be cancelled. In addition, the Ministry of Finance and the Prime Minister's Office are demanding that the JNF should transfer to the state NIS 1 billion, in addition to the NIS 2.2 billion already transferred.
The NIS 2.2 billion transfer was made under a signed agreement between the JNF and the state. The JNF now argues that if the state demands further sums and or seeks to pass a law to nationalize the JNF, this will constitute a breach of the agreement. The agreement stipulates that the state will not demand further sums from the JNF until 2021.
Great pressure is being applied to the JNF to transfer money to the state's finances. During the Finance Committee session, Atar, Horowitz, Bitan and Babad went outside from time to time for discussions in the corridor.
The committee discussion fostered an unusual alliance. MK Bezalel Smotrich (Habayit Hayehudi) and MK Eitan Broshi (Zionist Union) both spoke vehemently in criticism of the government and expressed their fear of intervention in and nationalization of the JNF. Both raised the technical argument of breach of the signed agreement between the government and the state, which they said the JNF had observed punctiliously, including the transfer of the agreed NIS 2.2 billion. They also raised the argument in principle that the JNF has special status, that it was responsible for settlement of the land, agriculture, fostering of local communities, and projects carried out directly with government ministries and local authorities that they claimed the Ministry of Finance was incapable of promoting.
"If it were up to the Ministry of Finance, we wouldn't have a state," Broshi said. "The JNF has the infrastructure for fostering agriculture and settlement, and the tradition of doing so."
Smotrich threatened to petition the High Court of Justice if legislation was passed in haste or without in-depth consideration, which amused those present since Smotrich has been a fierce critic of the court's interventions in legislation and government decisions.
At the end of the session, committee chairman Moshe Gafni announced that Babad, Bitan and Atar had reached agreement on a further transfer by JNF to the state.
Published by Globes [online], Israel business news - www.globes-online.com - on October 23, 2017
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