PM’s economic adviser calls for gas royalties to be invested in domestic infrastructure

Prime Minister Netanyahu’s economic advisor, Prof. Avi Simhon, tells a Knesset committee that funds from Israel’s natural gas bonanza that are supposed to be invested overseas via an interest-bearing sovereign wealth fund should instead be ploughed into infrastructure development in Israel — a move that would require a change in the law.

Rebutting claims from MKs that this would tempt the Knesset to misuse the funds, Simhon, head of the National Economic Council, says he trusts MKs to direct the money to the right place.

Simhon says he has always disagreed with his NEC predecessor, Prof. Eugene Kandel, about investing the funds abroad so as not to flood the Israeli economy with dollars. Now, with gas prices down, and predictions that only NIS 40 billion ($11.76 billion) will be in the wealth fund by 2030, the time is right to change direction and amend the law, Simhon says.

In late July, the Israel Tax Authority told the committee — set up to supervise the establishment of the sovereign wealth fund — that it expected payments from all the companies producing gas, oil and a range of other natural resources to reach NIS 200 billion ($59 billion) only by 2064, with between just $12 and $13.4 billion to be collected by 2030.

— Sue Surkes