Compensation deal for North takes shape

NIS 50m. in emergency assistance approved for local authorities.

By DANIEL KENNEMER, SHARON WROBEL
July 25, 2006 13:18
4 minute read.

 
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Employers who pay July wages on time and demonstrate that their workers were absent due to Homefront Command instructions would be granted compensation, according to an initial agreement reached between the Treasury, employers and workers. Further discussions will be held to hammer out a more detailed agreement, which will specify "the composition of the division of the payment" that employers will receive, the Finance Ministry said Monday. The "initial model" was the product of a task force headed by Budget Supervisor Koby Haber and including business sector representative Shraga Brosh, Histadrut labor union chairman Ofer Eini, Israel Tax Authority Director Jacky Matza and Industry, Trade and Labor Ministry Director-General Gavriel Maimon. Matza told the Knesset Finance Committee Monday that the team would meet again Tuesday, and that "by the weekend we will reach a conclusion as to workers' wages." The extent of the problem is as yet unclear and the fiscal costs of compensation will keep rising as long as the crisis continues, he added. So far, tax authority assayers have begun processing 2,955 cases of direct damage, Matza said, but stressed that additional files are continually being opened with every rocket attack coming from Lebanon and it is clear that the cases registered until Monday account for "only the tip of the tip of the iceberg" of the actual damage wrought. Registration of agricultural claims has been especially slow due to ongoing safety concerns, he said. The files opened until Monday include 2,500 cases of damage to buildings; 400 damaged vehicles; and "only" 42 cases of damage to fruit orchards and agriculture. Direct damages sustained were thought to total "hundreds of millions of shekels," Matza said. Claims on apartments may cover the full extent of the damage, but claims on the contents of such apartments and all personal affects therein may not exceed NIS 750,000, he noted. Matza stressed, however, that the authority had instructed its assayers not to be miserly when estimating a family's claims for compensation. "Tens of thousands of families are now experiencing the most difficult moments of their lives," he said. While direct damages as a result of wars or terrorist attacks can be claimed anywhere in the country, indirect damages can only be awarded to communities located within nine kilometers of the Lebanese border, according to current laws, he told the committee. In response, the Finance Committee ended the session by calling on Finance Minister Avraham Hirchson to declare all communities hit by Lebanese rockets as being in the "line of conflict," which would allow them to claim compensation on indirect damages from the Tax Authority. Haredi aid organization Zaka requested government assistance, despite its traditional reticence from doing so, due to the extent of the demand for food and care the volunteer group is handling. Health Ministry representative Ruth Ralbag said that Magen David Adom had lost NIS 4 million in the past 11 days, and that hospitals in the North had lost NIS 20m. in revenues. Following the direct rocket hit on Safed's Ziv Hospital, oxygen tanks at hospitals in the region have all been armored, and windows are currently undergoing treatment, she said. Local authorities are also in need of immediate assistance to be able to provide emergency services and avoid "fiscal collapse," said Shomo Buhbut of Ma'alot-Tarshiha. Interior Minister, Roni Bar-On, responded with the approval of the transfer of NIS 50 million in emergency assistance to local authorities affected by the conflict in the North. The financial emergency injection was allocated to serve two purposes: to help local authorities recover and pay salaries, while ensuring that local authorities are in a position to strengthen and stand behind the residents in the North during difficult times. Homefront Command itself told the committee that NIS 27m. was needed to install more alert sirens. A representative of the Manufacturers Association of Israel told the committee that 53 percent of the region's factories are completely shut down, while only 26% are operating fully. Roughly 1,800 factories in the North employ 100,000 workers. Regional hotel representative Tova Pinto said that 10,000 rooms in the north were empty, putting 9,000 employees out of work. Though loss of revenues came to nearly NIS 40m. for the first week of the crisis and NIS 30m. for the second week - and would total about NIS 120m. if the conflict lasts a full month - damages to tourism are by nature relatively long-term and the sector would take longer to bounce back than, for instance, agriculture or domestic services, she stressed. In light of absolute confusion and mixed messages from the government and Homefront Command over handling the security situation in the North, the business situation room of the Federation of Israeli Chambers of Commerce was overflooded by requests from employers and employees seeking clarifications. The FICC said that from midday Sunday its situation room, which has operated around the clock for the past week, had been dealing with thousands of requests regarding work relations, economic advice, foreign trade and compensation for businesses. Judging from the load of requests coming in, the main businesses affected by escalations in Haifa and the North were trade and services businesses including tourism, restaurants and shops. Many businesses are finding themselves in a liquidity crisis as their clients are not paying and are asking to be relieved from paying rent and arnona while their businesses are closed. Meanwhile, Eli Yishai, Minister of Industry, Trade and Labor, has asked the Supervisor of Banks Yoav Lehman to find ways and solutions to ease credit frameworks for small and mediumsized businesses that are hard-hit by the emergency situation. "Such action could save the economy millions of shekels," Yishai said.

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