Stas Freezes Debate on Treasury's Reforms

Finance Ctee won't discuss pensions, company cars or tax

Stas Misezhnikov, chairman of the Knesset Finance Committee, has frozen debate on the treasury's proposal to charge higher tax on use of company cars, and income tax credits (negative income tax).

All three reforms had been bundled into a single legislative proposal, which passed its first of three readings into law in the Knesset a month and a half ago.

Misezhnikov achieved the freeze through neglect, in a way. Last week the Knesset Finance Committee started to discuss the bill, but no further meetings have been scheduled for the topic.

Knesset sources say that because of the unstable political situation, there's no way the reforms could be promoted in the foreseeable future. There is no finance minister, for one thing, after Avraham Hirchson suspended himself. Prime Minister Ehud Olmert took the portfolio on a temporary basis. But making matters more complicated, the attorney general forbade the prime minister from remaining the acting finance minister because of investigations into Bank Leumi's privatization, which happened when Olmert was finance minister.

Anyway, Olmert is preoccupied with the aftermath of the Winograd report on the government's poor performance during the Second Lebanon War. He has to place somebody in the Finance Ministry and it's not impossible that the new minister will want to change the reforms.

Moreover, some parliamentarians don't see the Finance Committee moving on the reforms until the future of the coalition clears up. Labor is holding primaries in three weeks and the party may well quit the government afterwards, depending on who's elected. Next week the party center will be convening to discuss demands that it abandon the coalition.

At present the party is chaired by Amir Peretz, the defense minister, who has also sustained blistering criticism for his functioning during the war, mainly based  on his complete lack of experience in defense matters.

And in any case, the coalition has no majority in the Knesset Finance Committee to vote for the reforms.

Misezhnikov himself clearly states: "There will be no meetings of the committee regarding the bill until the political situation clears up," he said. "At the present I see no possibility of passing the bill regarding raising the value of using company cars."

He also, again, spelled out that he personally opposes the proposal, which he calls a death-warrant for anybody earning between NIS 7,000 to NIS 17,000 a month and allocated a company car. Also, he claims, the treasury's proposal ignores the age of the car when calculating how to tax its possessor.