The plan offers further benefits to Holocaust survivors and other people during the COVID-19 financial crisis * Bank of Israel governor warns against increasing the national debt ‘endlessly’.
By HAGAY HACOHENAn Israeli flag flutters outside the Bank of Israel building in Jerusalem(photo credit: REUTERS)
The government on Sunday approved the NIS 6.5 billion “Check for All” plan, championed by Prime Minister Benjamin Netanyahu and Finance Minister Israel Katz.The plan is designed to offer benefits to Israelis hurt by the economic fallout of the COVID-19 pandemic and the health restrictions imposed by the state.Netanyahu argued it would “get the wheels of the economy spinning again.” His critics warn that the prime minister is attempting to curb mass protests against his leadership with a political payoff.Scaled in relation to children per family, benefits begin with NIS 2,000 for a family with one child and increase by NIS 500 for each additional offspring up to three (NIS 2,500 for two, NIS 3,000 for three). Adults who are not yet parents would receive NIS 750 to their bank account. The National Insurance Institute (NII) is set to wire the funds.An additional NIS 750 will be given to Holocaust survivors, those disabled during their army service, those who immigrated to Israel less than a year ago and those who are currently receiving a state benefit to supplement their income. The double benefit of NIS 1,500 is meant only for those who are in need.The state benefit meant to supplement low incomes is NIS 2,500 per month, on average. Roughly half of those eligible to receive it are unable to obtain it due to the bureaucracy involved, Haaretz reported on Friday. “It is impossible to live off such a benefit,” an NII official said, adding that the sum should be increased.This pattern of the administration creating a new benefit mechanism, as opposed to using an existing one, was repeated when Interior Minister Arye Deri secured NIS 700 million to provide food benefits to poor families. Such a program is already in operation under Labor, Social Affairs and Social Services Minister Itzik Shmuli, who was able to secure NIS 12.5m. for it in May. But Shas preferred to divert funds via local councils.Haredi (ultra-Orthodox) politicians, including UTJ MK Moshe Gafni, who is head of the Knesset Finance Committee, objected to the “Check for All” plan not offering further benefits to those who have more than three children. He told reporters he would insist that benefits also be given for the fourth and fifth children.Increasing the budget “won’t delay the benefits being wired [to Israelis] by even one day,” Gafni said Sunday.Blue and White objected to the earlier, universal version of the plan. Alternate Prime Minister Benny Gantz tweeted on Sunday that the modified plan “gives more to those who have less” and “more to people who will consume [products and services] and will get the economy moving.”Netanyahu pointed to South Korea and Japan as two countries that offered benefits to citizens with the intention of improving their national economies.However, both countries curbed the coronavirus before offering aid and delivered it in the form of vouchers, ensuring that people would not save it in the bank. Unlike Israel, Japan subsidizes half the cost of domestic vacations to help the tourist industry, and their own citizens, during the coronavirus crisis.In the US – which, like Israel, delivered benefits during the coronavirus outbreak – it was reported that more than half of all citizens used the money.“We cannot continue to increase the debt endlessly,” Bank of Israel Governor Amir Yaron warned. Credit-rating agencies might punish Israel if they determine that the current administration is spending money on “irrelevant things,” he said, adding that the “government does not have a blank check.”While in the EU, experts warn of the coming “90% economy,” meaning that 10% of previous businesses won’t return, Israel is currently working at 85% capacity, The Marker reported, citing a Bank of Israel study.The government was expected to approve on Sunday a 0.16% cut in the budget for this year and the next to be able to grant the pay raise for social workers, who ended their recent strike.The cut, at press time, was only technical, as it is unknown what budget Israel will have.
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