Kassam rocket attacks have caused extensive damage to factories in the Sderot region and the Gaza Strip periphery, and hundreds of workers have been forced to leave their jobs, according to the Manufacturers Association of Israel. "The state of factories in Sderot and along the Gaza border is worsening day by day," association president Shraga Brosh said Sunday. "The direct and indirect damage has already cost more than NIS 60 million, and some 300 workers have already left." The government should adopt a proposal by Defense Minister Ehud Barak to give priority in government tenders to factories in Sderot and the Gaza periphery, he said. The initiative could generate tens of millions of shekels a year in government procurement for the businesses, he added. According to Barak's plan, government tenders would be awarded to factories in these preferred areas even if their bids were up to 15 percent higher than the lowest offer, provided they met all other conditions. Brosh called on the government to grant tax breaks to factory workers who live outside the besieged region but work in it. According to his proposal, some 1,000 workers, representing about 20% of the workforce, would receive a tax break of 13%. "If we want to maintain our national strength, we have to tackle our social and economic issues and needs, in addition to defense issues and concerns," Brosh said. "We need to make sure that even in these hard times experienced by Sderot and Gaza border residents, factories continue to operate at full capacity, providing for the salaries of thousands of workers living in the region." The 50% reduction in municipal taxes factories received from 2005 to 2007 should be extended to 2008 by the government, he said. In an effort to encourage employment and improve the quality of workers in the region, Brosh called on the government to allocate a budget of NIS 5 million for the training of workers in Sderot and the Gaza periphery. Last Tuesday, Finance Minister Ronnie Bar-On presented the High Court of Justice with a three-track compensation package designed to help business owners in Sderot and the Gaza periphery for losses incurred by the rocket attacks. The compensation package put forward to the High Court is based on recommendations formulated by an interministerial committee for providing help for all communities classified as border settlements, including Sderot and the Gaza periphery. Under the terms of the package, compensation will be instituted retroactively from last May.