Cabinet approves coronavirus economic relief package

The cost of the approved plan is estimated at NIS 10.5 billion.

Israel Katz chats with Prime Minister Benjamin Netanyahu at a cabinet meeting (photo credit: MARC ISRAEL SELLEM)
Israel Katz chats with Prime Minister Benjamin Netanyahu at a cabinet meeting
(photo credit: MARC ISRAEL SELLEM)
After a lengthy debate, the government on Monday night approved the plan by Prime Minister Benjamin Netanyahu and Finance Minister Israel Katz to expand the economic safety net, to provide immediate assistance to businesses and employees who are expected to be affected during the current coronavirus lockdown.

The cost of the approved plan is estimated at NIS 10.5 billion. Earlier today, a 10% cut in the salaries of Knesset members and ministers was approved. Katz noted that in the future he will bring forth a plan for cuts in other sectors, intended for individuals whose salary is equal to or greater than the salary of an MK, as well as officials in the justice system.

Netanyahu said at the beginning of the cabinet meeting that "on Thursday, we presented another financial assistance program for businesses in Israel, along with the economic safety net that will operate until June 2021. We announced additional grants for employee retention, an expansion of state-guaranteed loans [and] got advances for grants for businesses that were affected by the crisis by 25% or more, thus expanding eligibility. 

"The Finance Minister will today bring these and other decisions to the government, including the reduction of executive salaries by 10%. We must all bear the burden, and we as ministers must also stand together in one line behind the steps we will take – and in the face of the reality that will still be difficult."

The finance minister said that "today, the government approved the reinforcement and expansion of the economic safety net that we have cast, and which works well and helps the public. Following the decision to declare the lockdown, we decided to strengthen and expand the economic safety net with additional economic measures.

"We will continue to be attentive to the difficulties and come up with quick solutions that will provide a tailored solution for businesses, employees and the self-employed in the wake of the crisis," Katz added.

As part of the assistance, the fixed-expenses grant will be extended until October, and immediate advances will be given at the expense of the September-October grants, amounting to 50% of the fixed expenses grants for businesses that are expected to be affected by the closure.

In addition, in order to help employers who were forced to cut down on staff due to the lockdown, it has been determined that the lost employees will not be deducted from the official number of employees working for them, for the purpose of calculating the grant. Assistance will also be arranged regarding property taxes.

Lastly, in order to socially assist those affected by the situation, a postponement has been approved as to when the unemployment benefit reduction mechanism will apply.

In summary, the relief package includes:

• Payouts to businesses that lost at least 25% of their turnover compared to before the pandemic. An immediate 50% deposit of the expected payout will be distributed.

• Fewer criteria for grants to businesses that do not send workers on unpaid leave.

• Property tax relief for businesses that lost at least 25% of their turnover compared to what had been prior to the pandemic.

• A 10% cut in the salaries of ministers and MKs.

• A NIS 2.5 billion ($723 million) expansion of the budget for 2020 and an NIS 8 billion ($2.3 billion) expansion of the 2021 budget.