The prime minister’s economic adviser, Professor Avi Simhon, told a Knesset committee on August 11 that Israel’s natural resource revenues, which are supposed to be invested abroad in a paid fund, should instead be re- directed in the development of the country’s infrastructure.
Simhon said he had always disagreed with his predecessor, Professor Eugene Kandel, over whether to invest these funds overseas so as not to flood the Israeli market with dollars.
Following predictions that this sovereign wealth fund would only have $ 12 billion by 2030, Avi Simhon believes that a new course is needed.
By virtue of the fact that Israel’s natural resources belong to its citizens, all companies that profit from these resources are subject to a special levy to be paid to the sovereign wealth fund, which is to be used only for projects of public interest. such as education and health.
The companies have already paid around 12 billion shekels ($ 3.5 billion) while the sovereign wealth fund has yet to be set up.
The tax administration estimates that this levy on companies producing gas, oil and other natural resources will not reach 200 billion shekels ($ 59 billion) until 2064 – of which only $ 12 billion to $ 13.4 billion by 2064. 2030. Likewise, the billion shekels ($ 291 million) needed to launch the sovereign wealth fund operation would only be available between late 2021 and mid-2022.
Simhon thinks the tax administration’s current forecast is reasonable, with limited room for variation.
Professor Avi Simhon explained that the only OECD country with a sovereign wealth fund for natural resource revenues is Norway; but given that this country holds the equivalent of several trillions of shekels, this is not an example for Israel to follow.
He also added that large infrastructure projects were being undertaken by foreign firms, especially from China.
Source: Times of Israel