Finance C'ttee opposes using sovereign fund for defense

Committee chair Moshe Gafni: If the government doesn't stipulate that the fund will only be for social purposes, we will.

Knesset Finance Committee members oppose recommendations of the inter-ministerial team, headed by National Economics Council chairman Eugene Kandell, which will review the management of the state's revenues from oil and gas resources. During yesterday's discussion, committee members said that the team's recommendations violate the spirit of the Sheshinski Committee to use revenues from natural gas discoveries for social purposes.

Finance Committee chairman MK Moshe Gafni (United Torah Judaism) said that the committee would oppose the use of budgets from the sovereign wealth fund for defense purposes. "I will not allow the insertion of a clause to channel budgets for defense purposes into the law for the establishment of the fund. The law must unequivocally state the social purposes, and if the government does not do this, we will insert the clause into the law that will be sent to the Knesset for approval," he said, adding, "We will not pass a law that allocates additional budgets to the defense budget hole. This violates the spirit of the law. If the bill is not submitted to the committee within a month for approval, we will consider our steps."

The Finance Committee's opposition to using the sovereign wealth fund crossed party lines. MK Uri Yehuda Ariel (National Union) said that transfers should go to defense. MK Avishay Braverman (Labor) said, "The money should be defined so that it is not for defense, unless there is an extraordinary event. The money should be entirely channeled to social-economic security, and the Knesset is the sovereign. The money should not serve as the petty cash for this or any government. The Knesset is the body that should decide, not the prime minister."

MK Zion Pinyan (Likud) said, "The recommendations completely bypass the Finance Committee's decision on the establishment of the fund when it approved the Sheshinksi recommendations, because it is always possible to find ways to channel money for defense purposes or an emergency. That is why we must decide on a way to bypass the Kandell team."

MK Zevulun Orlev (Jewish Home) compared the recommendations to Swiss cheese. "They have big holes. After all government has a majority of 61 MKs. There should be a majority of 80 MKs, and an opposition too. The issue of defense and emergencies should be removed, because it is always possible to pass ad hoc laws. The law should stipulate specific social purposes. Once again, the economists are arranging so that this fund will not be designated for social purposes."

MK Raleb Majadele (Labor) was even more outspoken, saying that he would not support the recommendations as presented. MK Shlomo Molla (Kadima) said, "The recommendations again prove that the Ministry of Finance's officials are again finding a way to increase budgets available for the prime minister and the Finance Ministry. Why should we give a blank check to the government for some kind of extraordinary event?"

Published by Globes [online], Israel business news - www.globes-online.com - on February 23, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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