Business in Brief: October 21

Dankner freezes Makhteshim sale talks; Treasury mulls real estate tax cuts; Renewed strike to continue at FIBI.

Dankner freezes Makhteshim sale talks
IDB Holding Corp. Ltd. will suspend negotiations for the sale of Makhteshim Agan Industries Ltd. to China National Chemical Corporation (ChemChina) for one week. In exchange the Makhteshim workers committee will call off their aggressive personal campaign against IDB chairman Nochi Dankner. Representatives of Makhteshim’s management and workers announced the agrrement, late on Tuesday night at the end of a meeting mediated by Histadrut Labor Federation chairman Ofer Eini.
Makhteshim’s workers committee said that intensive negotiations would be held over the coming week “to keep 4,000 jobs in Israel”.
OnTuesday, Dankner said that Makhteshim’s factories in Ashdod and Ramat Hovav would stay in Israel even in the event of a sale to ChemChina, but that Makhteshim’s employees would have to recognize the necessity of improving the company’s efficiency.
“I’m pleased that Nochi Dankner has understood the workers’ determination to protect their home,” said Makhteshim workers committee chairman Yaakov Cohen. “I expect Dankner to prove that, beyond being a businessman, he is also a Zionist who takes care of Israel and Israelis’ interests, and will not abandon the future of 4,000 families and of the Negev.”
Treasury mulls real estate tax cuts
The Finance Ministry is continuing to plan its campaign against the real estate bubble. Sources inform Globes that the ministry is considering reducing the historic betterment tax and purchase tax on land for a limited period, in order to encourage sales and purchases in some of the 1.9 million dunam or 475,000 acres of privately owned land.
The proposal aims to release land on which developers can build homes, thereby cooling the overheated housing market by lowering home prices. An estimated 50,000 to 60,000 housing units can be built on privately owned land, a substantial part of which is the large bloc in north Tel Aviv.
Landowners who bought land before 2001 must pay a 49 percent betterment tax, which has created a clear disincentive to sell the land. In the present market climate, it is better to hold onto the undeveloped land and bequeath it to heirs.
The 2001 reform in land taxes, based on the Rabinovitch committee recommendations, stated that the betterment tax would be reduced to 25%, the level for the sale of financial assets. Nonetheless, most land was bought before 2001, and the high tax rate holds up land sales. The Treasury’s plan would cut the betterment tax to 25%, regardless of the date of purchase. The cut would apply for a limited time, resulting in an expected pressure to sell.
Renewed strike to continue at FIBI
First International Bank of Israel workers committee chairman Hanoch Livneh announced on Wednesday that the strike at the bank will continue on Thursday.
Bank branches were again closed on Wednesday because of the strike by 2,000 employees declared as part of the labor dispute over disagreements with the management.
The disagreements are over bonuses for 2010 and customer marketing policy. On Wednesday, 150 employees demonstrated outside First International Bank's headquarters in Tel Aviv, and carried signs denouncing controlling shareholder, Zadik Bino.