Netanyahu Gives Gas to Sheshinski Proposals

A person close to the prime minister quotes PM as saying: 'Any change to the resolutions would constitute injury to the public.'

Prime Minister Benjamin Netanyahu is rolling up his sleeves to push through the legislative changes to the state's natural-resource royalty rates as recommended by the Sheshinski Committee. By doing so, he would stand his ground against Likud members of the Knesset Finance Committee who are demanding changes to the bill being considered.

A person close to the prime minister quoted Netanyahu this weekend as saying, "Any change to the resolutions would constitute injury to the public." According to sources close to Netanyahu, he declared that elected officials' main obligation is to the public and its interests.

sheshinski - GPO - March 20 2011

"Netanyahu studied all of the material in great depth and has concluded that the Sheshinski Committee's recommendations give fair profits to the entrepreneurs" while contributing the right amount to the public purse, a source said.

The sources said that Netanyahu intends this week to do everything he can within Likud and beyond to ensure that the panel's recommendations remain intact on their way to being passed into law.

The prime minister, who is also in charge of economic strategy, will summon MKs Zeev Elkin, Zion Fanian and Miri Regev, his three problematic party colleagues on the Finance Committee, to set them straight before Wednesday's scheduled vote on the royalty restructuring proposal. He will also ask Yisrael Beiteinu to impose coalition discipline for the vote, in a bid to bring MKs Fania Kirshenbaum and Lia Shemtov, Knesset Finance Committee members who oppose the Sheshinski recommendations, into line.

Even without these five recalcitrant MKs, the recommendations as approved by the cabinet have the support of a majority of Finance Committee members, with ayes expected from its 12 other members. It's not the votes that count here, it's the humiliation to Likud of having to rely on members of the opposition to push through one of the pillars of Netanyahu's policy.

The prime minister's party even considered swapping out Elkin, Fanian and Regev for their understudies on the committee, Likud MKs Ofir Akunis, Danny Danon and Yariv Levin, before realizing that these three also oppose the Sheshinski recommendations.

Likud sources over the weekend sounded confident about the odds for turning Fanian and Elkin before the vote. Fanian said last night that he would spell out his position to Netanyahu but would in the end vote with the prime minister. Elkin said he would vote as Fanian did. Last week they and Regev were demanding alterations to the recommendations such as reducing the royalties charged to the natural gas companies or obtaining the promise that a separate kitty would be created for this money.

Yisrael Beiteinu asked for the fee structure to remain steady for 10 years, to make it easier for exploration partners to obtain credit. Associates of Netanyahu said there was no reason to change the recommendations and stressed that Netanyahu wants to put the additional state revenues from the royalties into a fund for security and education, so the people can benefit from them.

Finance Minister Yuval Steinitz is also dead-set against making anything other than cosmetic corrections to the Sheshinski recommendations. He is especially opposed to making concessions to the exploration companies and does not particularly care whether opposition members on the Knesset Finance Committee are needed to make the bill happen.

Finance Ministry aides say they fear that if the draft law is not approved by the committee this week and passed in second and third readings in the Knesset next week, before the Passover hiatus, the bill will simply die.