Treasury agrees to plan for South

Businesses, workers to receive compensation for war-related losses.

Bar-On 248.88 (photo credit: Ariel Jerozolimski)
Bar-On 248.88
(photo credit: Ariel Jerozolimski)
The Finance Ministry, Histadrut Labor Federation and employer organizations have agreed on a plan to compensate businesses and employees in the South for damages suffered during Operation Cast Lead. In a meeting Monday night with Finance Ministry budget supervisor Ram Belinkov, Israel Tax Authority head Yehuda Nasradishi, representatives of the manufacturers and the Histadrut, it was agreed that workers employed within a range of 40 kilometers of the Gaza border may be eligible for compensation. A final agreement is expected to be signed over the next few days. It will be presented to the Knesset Finance Committee for approval at the beginning of February. Under the terms of the agreement, workers who were forced to miss working days during the war will be compensated. In addition, employees who stayed home to take care of children under 14 years old because schools were closed will also be eligible for compensation. Employers will pay workers in full for missed working days, subject to conditions for which they will be compensated by the Tax Authority. The compensation model offers employers the option to choose one of three compensation tracks. Employers in the South will be able to apply for compensation to be reimbursed for salary payments of workers who were absent from work. The second compensation track applies to compensation for lost revenues during the month of January because of the operation, which will be calculated by comparing revenue figures for January 2008 with January of this year, while neutralizing the impact of the economic crisis. The third track applies to compensation for operational damages caused during the month of January incurring extra costs. The Manufacturers Association of Israel announced Tuesday that it has entered into an agreement with Clal Finance Factoring, offering 2,000 factories that are members of the association financing sources at preferential terms to provide a temporary solution to the credit crisis. Although the Bank of Israel has been cutting interest rates over recent months, the country's banks have not passed on the cuts to business owners and companies. The association said the possibility of raising credit via bonds has also become impossible, in light of the situation in capital markets amid the global financial crisis. Pinchas Kimmelman, chairman of the CFO forum at the association, said the credit crunch in the business sector, in general, and industry, in particular, was expected to lead to an increase of 25 percent in factoring deals in 2009, amounting to a volume of NIS 10 billion. In 2008, factoring deals amounted to a volume of more than NIS 8b., up from NIS 6b. in 2007.