Minister of Finance Yair Lapid can say that the Jewish National Fund (JNF) gave in, and JNF chairman Efi Stentzler and CEO Meir Spiegler can say that JNF was saved from getting bogged down in a mess. For now, JNF's special status has not been touched, in exchange for NIS 1 billion in the 2015 budget for land development infrastructure, as decided by a special directors general committee.
It was obvious that some compromise would eventually be reached in relations between the JNF and the government. It began with Lapid's demand for a regular NIS 500 million annual "contribution" by JNF to the budget, with a threat of canceling its real estate tax exemption and its exemption from the Mandatory Tenders Law, and Minister of Justice Tzipi Livni's demand for the cancelation of JNF's exemption from auditing by the State Comptroller. It continued with a deal proposed by Minister of Housing Uri Ariel: JNF would give NIS 2.5 billion, which Ariel would distribute as he saw fit, in return for maintaining JNF's independent status, especially the principle that JNF land would not be sold to Arabs.
The prospect of exposing JNF's NIS 4 billion treasury and NIS 1.25 billion in annual revenue from the sale of its land, which makes it a party at interest in higher prices for land zoned for residential purposes, combined with the public criticism of the absence of transparency and doubts about the necessity of its existence, decided the issue, whether you call it an agreement-surrender to blackmail or an old-time Labor Party compromise.
The question is whether this is a one-time affair, as argued by JNF, or a precedent for future years, as the Ministry of Finance thinks, although not necessarily on the same scale.
The test will come in 2015, when the 1961 convention signed by JNF and the state expires and planning of the 2016 budget begins, when the Finance Ministry's threat will be, "If you don't agree to continue 'contributing,' we'll charge you 65% real estate tax on your income from the sale of land."
Published by Globes [online], Israel business news - www.globes-online.com - on October 5, 2014
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