Treasury: Israel government gas revenues worth NIS 20b.

This is the first time that the financial report includes an estimate of the state’s rights to oil and gas discoveries.

By ADRIAN FLUT/GLOBES
Tamar 311 (photo credit: Courtesy)
Tamar 311
(photo credit: Courtesy)
Israel has proven rights to NIS 20.3 billion in oil and gas revenues, states the accountant general at the Finance Ministry in the government’s financial report for 2011. This is the first time that the financial report includes an estimate of the state’s rights to oil and gas discoveries.
The accountant general’s estimate is based on proven oil and gas discoveries, ie. 250b. cubic meters (BCM) of gas at Tamar in 2013-40, 3.5 BCM at Yam Tethys in 2012-13, and 1.2 BCM at Noa in 2012. The accountant general estimates the government’s take at NIS 5.4b. from 12.5 percent royalties on revenue, plus a net NIS 2.3b. from the companies tax, and NIS 12.6b. from taxes on profits (the Sheshinski law).
Since Leviathan is not yet defined as a discovery, it is not counted as an asset in the state’s accounts.
The state also has NIS 4.5b. in royalties rights for potash, NIS 1.25b. from sand and gravel quarries, and NIS 270 million from phosphates.
For the first time, the government’s financial report includes an assessment of state land. The 16,000 dunam (4,000 acres) of state land is valued at NIS 303.7b. A quarter of this land is occupied, and assessed at NIS 13b. Most of the valuation is for farmland, which is assessed at NIS 5.4b.
Most available land (12m. dunam or 3 m. acres) is valued at NIS 290m., including 82,000 dunam (20,500 acres) zoned for residences, which is valued at NIS 115b. Most land in Israel (11.8m. dunam or 2.95m. acres) is farmland or open space, and is available.
The profit and loss statement says that the government has NIS 366b. in assets and NIS 1.77b. in liabilities (200% of GDP). The liabilities grew by NIS 120b. in 2011. The Finance Ministry says that the level of liabilities is low compared with European countries.
Most government revenues in 2011 were from taxes (NIS 232b.), and its largest expenditure is on salaries (NIS 110 b.), although this item shrank by 21% compared with 2010. In terms of use, 45% of government spending is on defense and National Insurance payments. In terms of liabilities, 70% are loans (NIS 700b.) and pensions (NIS 569b.), half of which are for defense establishment employees.
Israel’s citizens owed the Tax Authority NIS 21.5b. in 2011, 10% of tax collections, up from NIS 20.5b. in 2010. The Finance Ministry said, however, that these were not bad debts, but debts in process. Bad debts totaled NIS 62b. in 2011, including NIS 54.2b. owed to the Tax Authority; NIS 3b. to the Israel Land Authority; and NIS 2b. to the Ministry of Industry, Trade and Labor.
On the basis of these figures, were the government to collect half of the bad debts, it could cover the expected budget deficit for 2012.