Government rolls out unprecedented NIS 80b. financial aid package

The Israeli Employment Service said that a total of 20,413 new applicants registered for unemployment benefits on Sunday night and Monday, bringing the total number of claimants to over 962,500.

Finance Minister Moshe Kahlon (photo credit: MARC ISRAEL SELLEM)
Finance Minister Moshe Kahlon
(photo credit: MARC ISRAEL SELLEM)
After significant delay, the government published its major economic plan to soften the blow of the coronavirus  outbreak on Monday, promising NIS 80 billion in financial aid for the healthcare system, struggling businesses, salaried employees and self-employed workers.
"I say to all Israeli citizens, we will return to our financial strength, to a much greater extent than people expect, and much faster," said Finance Minister Moshe Kahlon in a televised address prior to confirming his departure from politics.
"This situation will not last forever and I believe that, immediately after Passover, the economy will gradually start to return to work. The program presented today is the largest and widest in scope that the Israeli economy has ever seen."
The release of the program was significantly delayed, with Prime MInister Benjamin Netanyahu promising on March 22 that details would be provided within 48 hours.
Ultimately, the financial aid package, amounting to approximately 6% of Israel's gross domestic product, involves commitments of NIS 70b. in funds, in addition to NIS 10b. of financial assistance already promised in recent weeks.
The package features funds for the healthcare system and assisting at-risk population groups; a "social security safety net" for salaried employees, self-employed workers and the elderly; to support businesses harmed by the outbreak; and an program for the acceleration of the economy and stimulus for critical growth engines.
A total of NIS 10b. will be allocated to the healthcare system to fund the purchase of ventilators, the cost of 20 million tests during 2020, personal protective equipment, to stabilize hospital budgets and finance additional isolation facilities. An additional NIS 1b. will fund initiatives to assist at-risk groups and the elderly population.
The program's NIS 20.4b. "social security safety net" will provide NIS 3b. for self-employed workers; NIS 3b. to fund unemployment benefits for workers aged over 67; NIS 200m. for professional training for unemployed workers; NIS 14b. to subsidize employees placed on unpaid leave; and NIS 200m. for nonprofit organizations.
Kahlon said self-employed workers whose income had been damaged by the current crisis will be eligible for two grants: a first payment up to NIS 6,000 in April and a second payment up to NIS 8,000 in May.
A total of NIS 40.7b. will be allocated to ensuring "business continuity," including the cancellation of municipal tax; low-interest loan funds; deferrals of VAT, social security payments and utility bills; and tax rebates.
Finally, NIS 7.9b. will allocated to bolstering economic growth engines, including NIS 4.8b. for a "crisis exit program"; NIS 1.5b. for the hi-tech industry; NIS 1.1b. for accelerating infrastructure projects; and NIS 300m. for improving digital services for citizens.
"I am aware that [the financial package] won't return the situation to what it was prior to the crisis. Not for businesses, employees or the self-employed," said Kahlon. "But we are speaking about the most significant program that the Israeli economy has ever known. I have no doubt that if this crisis will continue, we will need additions. We will not allow the Israeli economy to collapse."
Kahlon also appealed to all financial institutions, including banks, to assist citizens and offer relief where possible.
"We will do everything we can to return our economy to a path of growth," said Prime Minister Benjamin Netanyahu. "We have known large financial crises in the past, and we will overcome this one too, together."
Earlier on Monday, hundreds of self-employed workers gathered at Jerusalem's Israel Museum to protest the measures slated to be included in the financial plan.
"We don't trust any politician," Adv. Roi Cohen, president of the Israel Chamber of Independent Organizations and Businesses (Lahav), told protestors, according to Yediot Aharonot.
"We will lead the economy. Two-hundred thousand business owners will hjave nowhere to go. We are approaching bankruptcy for the business sector. We demand equality and unemployment pay."
The Israeli Employment Service said that a total of 20,413 new applicants registered for unemployment benefits on Sunday night and Monday, bringing the total number of claimants to over 962,500.
Since the start of March, nearly 805,000 new applicants have requested support from the Employment Service - 89.9% of whom are employees placed on unpaid leave. Authorities expect total claimants to reach one million before the Passover holiday.
There are over 44,300 families with both parents claiming unemployment benefits, representing 15.28% of all claimants, the National Insurance Institute (Bituach Leumi) said. According to the Labor and Welfare Ministry, there have been applications from 4,000 women during the past two weeks who are either currently pregnant, on maternity leave or undergoing fertility treatment - compared to 1,200 during a normal year.