Commerce rejects compensation plan

Against the backdrop of the discussion, members of the Knesset Finance Committee toured five cities in the North to personally view the extent of damage and assess its impact on business and the economy of the region.

July 27, 2006 06:45
2 minute read.
haifa damage 88

haifa damage 88. (photo credit: )


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An agreement between the Treasury and business representatives that would compensate industry for war-related losses based on wages paid to absent workers ignores the reality in the commerce and services sector, the Federation of Israeli Chambers of Commerce said Wednesday. "Damages caused to employers in the commerce and services sector are not a function of a drop in the number of workers due to absence from work," said Uriel Lynn, president of the organization, in an urgent letter to Finance Ministry Budget Supervisor Kobi Haber and Shraga Brosh, chairman of the Federation of Israeli Economic Organizations, who also is serving as chief negotiator for the business sector. The arrangement currently under discussion, according to Lynn, would be "inappropriate" for the commerce and services sector and incapable of accurately reflecting its losses since turnover volumes can drop sharply even if the work force is present in full. "For this reason, we cannot be part of this arrangement," he said, calling for separate negotiations with that group, as with agriculture and the hotel industry. "To my regret, Budget Supervisor [Kobi Haber] chose not to include us in the discussion on the arrangement taking shape and this is the dismal result," Lynn charged. Brosh and the Treasury continued talks toward an accord Wednesday night. Against the backdrop of the discussion, members of the Knesset Finance Committee on Wednesday toured five cities in the North to personally view the extent of damage and assess its impact on business and the economy of the region. The committee held a special session in Karmiel to discuss the matter but further details were unavailable Wednesday evening. Separately, Industry, Trade and Labor Minister Eli Yishai signed an order extending the government's power to require factories and services considered vital to residents of the North to maintain operations to businesses located in the larger conflict zone defined by Defense Minister Amir Peretz. Services and businesses potentially included in the order are electricity production, water provision, food producers, welfare institutions, clinics, fire fighters, telecommunications service providers. Yishai also asked Interior Minister Roni Bar-On to exempt businesses in the conflict area from paying arnona municipal taxes for the duration of the fighting. Bar-On should also compensate the local authorities for lost revenue and unexpected costs, he said. The Manufacturers Association of Israel said that the on-going closure of more than half the factories in the North has cost the region's industry an estimated NIS 2.3 billion in damages so far. Israeli defense contractors, on the other hand, have supplied the army NIS 200 million to NIS 400m. in weapons and spare parts to address Hizbullah's offensive, even with some of the sector's factories closed in the North.

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