Barak Bolting Labor May Help Netanyahu Pass Royalties Reform

Knesset sources say the resignations of Ben-Eliezer, Herzog and Braverman will only encourage Netanyahu to fight to pass the Sheshinski Committee's recommendations.

Yesterday's political upheavals - the split in the Labor Party and the resignation of three Labor ministers - may actually make it easier for Prime Minister Benjamin Netanyahu to find a cabinet majority to approve the Sheshinski Committee's recommendations on taxing Israel's natural resources.

Benjamin Netanyahu

The committee has recommended increasing taxes on profits from natural gas and oil production, and the industry has been applying heavy presure on MKs and ministers to vote down the recommendations.

Knesset sources say the resignations of Industry, Trade and Labor Minister Benjamin Ben-Eliezer, Social Affairs Minister Isaac Herzog and Minority Affairs Minister Avishay Braverman will only encourage Netanyahu to fight to pass the recommendations in the cabinet and Knesset. This would prove he is running a strong and stable government.

Netanyahu is expected to announce soon whether he wants to make changes to the Sheshinski Committee's recommendations or accept them as is.

The Knesset Finance Committee, headed by Chairman Moshe Gafni (United Torah Judaism ), will vote on the recommendations after cabinet approval, and Netanyahu is expected to receive the support of all coalition MKs on the committee, with the exception of two from Yisrael Beiteinu: Fania Kirshenbaum and Lia Shemtov. Netanyahu will need the support of at least nine of the 17 committee members.

Yisrael Beiteinu opposes the Sheshinski recommendations, following the lead of National Infrastructure Minister Uzi Landau (Yisrael Beiteinu ). But party head and Foreign Minister Avigdor Lieberman holds the key to the coalition in the wake of the Labor ministers' resignations.

Knesset sources expect Lieberman to take advantage of this power to influence Netanyahu on the Sheshinski recommendations. "The party is sticking to its policy on the matter," Yisrael Beiteinu said.

Changing direction

The Knesset Economic Affairs Committee voted yesterday to support the Sheshinski recommendations, reversing its vote from two weeks ago. Yesterday, nine MKs voted to support the advice and two voted against. The motion for a revote was proposed by Shelly Yachimovich (Labor ).

The Kadima faction will meet soon to discuss the request of MK Shlomo Molla (Kadima ) to support the Sheshinski recommendations.

The committee, headed by MK Carmel Shama-Hacohen (Likud ), passed a resolution stating it was appropriate to apply the fiscal and tax changes to existing exploratory sites as well, and for all natural resources, "which belong to the state and its citizens. The natural gas and oil companies are only partners in their production."

The two MKs opposing the resolution were both from Yisrael Beiteinu: Hamad Amar and Anastassia Michaeli.

"The committee's decision sent a clear message to the prime minister that there is no political need to compromise on the final conclusions and it is possible to implement them easily and quickly in the Economic Affairs Committee," Shama-Hacohen said.

He added that the previous vote against the recommendations sparked extreme comments by oil and gas executives - such as Delek Energy CEO Gideon Tadmor - that the gas discoveries don't belong to Israel's citizens. "A statement like that is the height of chutzpah," said Shama- Hacohen.