The Knesset Finance Committee yesterday threatened that if Prime Minister Benjamin Netanyahu doesn't convene a public inquiry to look into the concentration of economic power in Israel by mid-October, the Finance Committee would promote private member bills.
The resolution was drafted by Haim Oron (New Movement-Meretz ) and was supported by committee chairman Moshe Gafni (United Torah Judaism ) and Miri Regev (Likud ). Labor's Shelly Yachimovich, who opposes a public inquiry, eschewed the vote.
The Knesset Finance Committee wants the public committee to examine cross-ownership of financial and other companies. It also wants to abolish tax breaks on dividends paid within pyramid structures. (A quirk of Israeli tax law enables the owners of pyramids to avoid tax on dividends paid by companies within the group to other companies within the same group. )
"Israeli governments are for the most part lazy and cowardly," Gafni said, adding, "it the current government doesn't submit a bill, we will. The committee's resolution will spur the government to convene a public committee."
He considers the matter of economic concentration to be urgent, Gafni said. A very small group of people owns large swathes of the economy, he said: "One day the government will be superfluous, and the country will be run by those same people. Every decision they make can cause a shock. We are becoming a country that cannot be criticized, because the media will also be in their hands."
Oron suggested that the inquiry have representatives from academia and former regulators. In a document presented to the Finance Committee, he wrote: "Israel is one of the countries with the highest concentrations of economic power in the Western world. Without the intervention of the legislature or the cabinet, it will grow stronger."
Concentration of economic power increases the credit risk at banks, he said. It also impairs the quality of information to investors. Resource allocation becomes inefficient, which drags on growth and impairs the wellbeing of society.
Shelly Yachimovich however is not enthralled with the concept of an inquiry. "It prompts concern," she said. "It will be an excuse for the government not to promote these bills. We are castrating ourselves with our own hands if we call for a public inquiry."
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