Treasury signs compensation deal for August

The two-week delay has caused damage to thousands of small and medium-sized businesses.

By SHARON WROBEL
September 7, 2006 23:15
2 minute read.
closed businesses 88 298

closed businesses 88 298. (photo credit: Ariel Jerozlimski)

After continued pressure by the business sector, the Treasury, together with employers and employees, finally signed the compensation deal for damages caused to businesses in the North by the war. "The Treasury will have to explain to the businesses in the North why the implementation of the August compensation deal, which was agreed upon on August 27 has been delayed by nearly two weeks," said Uriel Lynn, president of the Federation of Israeli Chambers of Commerce. He added that the unreasonable delay has caused damage to thousands of small and medium-sized businesses. Fine tuning of the compensation agreement was achieved after continued discussion among Finance Ministry budget chief Koby Haber, Tax Authority director Jacky Matza, Shraga Brosh, president of the Federation of Economic Organizations, and Histadrut Chairman Ofer Eini. The compensation agreement will be voted on by the Knesset Finance Committee on Monday. Under its terms businesses will be offered the choice of two compensation packages. The first will be similar to the July agreement, which compensated businesses by 132.5 percent, whereas for August they will be compensated for 145% on the basis of payment of salaries for the absence of workers. As for July damages, government, employers and employees will share the cost of the compensation package, except that employers will only have to share 15% of the cost rather than 27.5% as in July. More importantly, the Treasury will offer the choice of a second compensation package to cover businesses for lost proceeds during the fighting in August. Under the terms of the second compensation package, businesses with annual turnover of up to NIS 1.5 million will be eligible to receive compensation payment for 65% of the difference between their revenues in August 2006 and August 2005. Businesses with annual turnover of between NIS 1.5m. and NIS 10m. will be compensated for 55% of the difference, while businesses with annual revenues of up to NIS 30m. will be compensated for 50%. Finally, businesses with annual turnover of more than NIS 30m. will be compensated at a rate of 45% but not more than NIS 3m. "We are pleased with the compensation deal for August, but we demand that the choice of a second compensation package must also be offered retroactively for July from the time the fighting in the North started," said Ahikam Bar-Levy, director of the Galilee Development Company, which runs 35 kibbutzim in the Galilee and the Golan and manages 11 factories. Meanwhile, the government task force on the strengthening and development of Haifa and the North, headed by Prime Minister Ehud Olmert, has approved NIS 4 billion for the rehabilitation of war damage. Government ministries will transfer NIS 1b. from their budgets which will be invested into new and current projects. Another NIS 1.5b. will be financed by the state budget. Of this amount, NIS 725m. will be allocated to a team, headed by Efrat Duvdevani, director-general of Vice Premier Shimon Peres's office, for economic and infrastructure projects in the Galilee. The remaining NIS 1.5b. will come from non-governmental sources, such as donations by Jewish communities and organizations around the world. Jewish communities overseas, mostly in North America, are estimated to have raised around $300m. for reconstruction in Haifa and the North. Peres, who is responsible for raising non-governmental resources, said that Jewish communities could raise around $500m.


Related Content

The Teva Pharmaceutical Industries
April 30, 2015
Teva doubles down on Mylan, despite rejection

By GLOBES, NIV ELIS