Analysis: With the ILA reform, PM can finally point to an achievement

After folding on produce VAT, Netanyahu keeps a campaign promise.

By RON FRIEDMAN
July 13, 2009 23:12

After caving to pressures on both the economic and diplomatic fronts, Binyamin Netanyahu finally has an achievement he can feel proud of. Following hours of marathon deliberations that carried on until 2 a.m. Monday, the Knesset's Economic Affairs Committee succeeded in passing the Israel Land Administration reform plan, one of Netanyahu's major campaign promises. From there it goes to the Knesset floor where it will in all probability be passed along with the rest of the budget. All along, Netanyahu and his backers have argued that the imputes for the plan was to restructure the ILA and turn it into a more efficient body, one that could focus on its main task of making the state's land available for development, instead of having to sign off on every homeowner's application to add a room or close off a balcony. But the structural change was only a small part of the overall reform plan. In truth, Netanyahu would have faced little opposition if it ended there. There are few in Israel that hold any affection for the ultra-bureaucratic body. The real change that the law saw through is the allowance of private ownership of Israeli land. Since its inception it has been state policy not to sell land outright to homeowners. "The ownership of Israel lands, being the lands in Israel of the state, the Development Authority or the Keren Kayemet Le-Israel [the Jewish National Fund], shall not be transferred either by sale or in any other manner," according to the basic law regarding Israel lands that was pushed through by David Ben Gurion in 1960. Instead, buyers are allowed to lease the land for a period of 49 years, with an option to extend the lease almost automatically. The rationale for state ownership of 93% of the total land area has always been that is a key instrument for achieving the country's territorial and demographic stabilization. In recent years, the justification of state-owned land has been eroded. Critics said that it was an outmoded system that did nothing but contribute to bureaucracy and raise real estate prices. One of Netanyahu's campaign promises was to reform the ILA to reduce housing costs and spur a building boom, creating jobs and generating economic growth. The government authorized the land reform in April, shortly after being sworn in. The plan was then included in the 2009-2010 economic arrangements bill. That's when the issue became toxic. Land ownership is important everywhere, but in a country as small as Israel, with its significant demographic concerns, it becomes critical. The plan was immediately attacked by critics from all across the political spectrum. Environmentalists, Zionists, socialists, farmers, Arabs, and the religious, all saw the reform as a disaster and viewed the attempt to pass it under the auspices of the economic arrangements bill as an underhanded political ploy. Though for widely different reasons and propped by often opposing ideologies, all the critics decried the privatization of state lands as a historic tragedy. Doomsday scenarios were raised of the land being purchased by Saudi Arabian oil magnates or ending up in the hands of a small cabal of real estate tycoons. Conferences were held, temporary coalitions were formed, speeches were made in the Knesset plenum and committees, a protest group with the unwieldy name The Core of the Fight Against the Privatization of the Land in Israel was even formed especially to battle the reform. Whether as a result of the public indignation, or for reasons of his own, Knesset Chairman Reuven Rivlin decided that it was improper for the reform plan to remain part of the economic arrangements bill and ordered a special Knesset subcommittee to be formed under the auspices of the Economic Affairs Committee to address the reform separately. The split turned out to be merely virtual, as it was made clear that the law had to pass through the committee before the budget was voted on in the Knesset. Thus began days of deliberations with the committee hearing testimonies by dozens of experts, officials and special interest groups. Altogether the committee spent nearly 50 hours debating the points. For the critics it wasn't enough. They felt that giving the deliberations a time limit meant that the coalition members were going in with their minds made up and that the whole debate was a sham. Opposition members did their best to delay the voting, introducing reservation after reservation and drawing out every point to the utmost. But when the voting finally started it became clear that coalition members weren't swayed by the antics and outvoted the opposition time after time. The few changes that were introduced to the law proposal, for the most part came from committee chairman Carmel Shama from the Likud. As he had the automatic support of the other coalition members from the Likud, Shas, UTJ and Israel Beiteinu, his compromise suggestions passed largely un-debated and uncontested. Thus the ability to sell land to private owners was ultimately limited to an area of 800,000 dunams, which make up 3.65% of the total land available, whereas the original proposal had no limit whatsoever. What was perhaps the biggest challenge to the reform took place outside the committee. Members of the agricultural communities, the kibbutzim and moshavim, were able to recruit Labor bigwigs Shalom Simhon and Ehud Barak to their cause, and thus managed to make sure that the reform, which originally wasn't supposed to include land in rural villages, would benefit them as well. According to insiders, Barak threatened Netanyahu with a coalition crisis and the latter agreed to include the farmers. At the end of the day, the approval of the reform plan was a tribute to coalition loyalty. After passing in committee, the bill will be voted on by the plenum alongside the rest of the budget, where it will in all likelihood pass. After folding on the fruit and vegetable VAT tax and waffling on a two-state solution, Netanyahu finally has a real achievement under his belt. As a result of the reform, 808,000 people who currently lease the land will turn into its owners, the ILA will be dismantled and replaced by a more efficient organization, the government will have a deciding majority in the land administration council, the new authority's steering body and Israelis will be able to close off their porches with slightly less bureaucracy.


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