Inside Netanyahu’s NIS 80 b. plan to help Israelis amid mounting debt

Netanyahu said the country shouldn’t fear taking loans to extend unemployment benefits until June 2021, activists cry out “we’re condemned to take on debts we could not repay as long as we live.”

By HAGAY HACOHEN
Israeli prime minister Benjamin Netanyahu at the weekly cabinet meeting on June 28, 2020. (photo credit: OLIVIER FITOUSSI/FLASH90)
Israeli prime minister Benjamin Netanyahu at the weekly cabinet meeting on June 28, 2020.
(photo credit: OLIVIER FITOUSSI/FLASH90)
Prime Minister Benjamin Netanyahu and Finance Minister Israel Katz presented a much anticipated recovery plan to the tune of NIS 80 billion on Thursday to mitigate the suffering endured by a million unemployed Israelis who witnessed their jobs – and for many, their entire careers – ending suddenly due to the coronavirus.
The plan includes the extension of unemployment benefits until June 2021 or as long as the country’s unemployment rate is above 10%; it is currently 21%. If approved by the Knesset, Israelis could begin getting aid after two weeks of unemployment.
A NIS 7,500 grant to about 380,000 self-employed workers and business owners will be delivered by the Tax Authority on Wednesday, if approved by the government on Sunday. Netanyahu told the public that, unlike previous efforts, no applications will be needed to get the money.
Those who had annual gross income of up to NIS 640,000 and suffered a decline of at least 40% will be given a bi-monthly grant which can reach up to NIS 15,000 every two months if approved. The grants are due to continue until June 2021 and match their losses. So, for example, those that had annual revenue of up to NIS 100 million and suffered a 40% decline would get a bi-monthly grant of half a million NIS. If they report a 60% decline, they would also get their property tax reimbursed until June 2021.
Should the Knesset Finance Committee approve it, the state would also extend the loans it offers to businesses. The committee, headed by United Torah Judaism MK Moshe Gafni, will be asked to approve adding NIS 28 b. to the amount allocated to state-sponsored loans, reaching a total of NIS 50 b. to be earmarked for this purpose. Approved loans could cover up to 24% of a business’s annual gross income – and they could ask for more than one loan.
Smaller businesses would receive similar aid based on the same format, with those having gross income of NIS 100,000 getting a bi-monthly grant of NIS 3,000, those with NIS 200,000 getting a grant of NIS 4,000 every two months, and those with NIS 300,000 getting a bi-monthly grant of NIS 6,000.
The aid is also extended to those who opened a business in January or February, with bi-monthly grants of NIS 3,000 to businesses with revenue of less than NIS 100,000 per year and NIS 4,000 to those with more. Existing businesses could have their licenses expanded until June 2021 if Knesset legislates the change.
Those who have advanced study funds will be able to use them without paying taxes for a period of six months, and former IDF soldiers will be able to use their discharge grants, usually restricted for studies or buying a home, for any reason. Both actions require Knesset approval of new legislation.
In his Thursday speech, Netanyahu repeated his claim that bureaucracy and the need to submit bills to the Knesset for approval are time consuming processes that hinder his administration’s ability to cope with the coronavirus pandemic. Some point to the recently approved emergency measures as a dangerous slippery slope that removes Knesset oversight on actions of the government under the flag of a global emergency.
The plan also includes an adjustment grant of NIS 4,000 to unemployed people over 67, to be given monthly until December, if approved in Knesset. The Association of Bus Drivers appealed to Transportation Minister Miri Regev on Friday to allow the elderly to enjoy free public transport during the pandemic.
On Thursday, Netanyahu told the press that Israel has “no reason to fear taking loans” to finance these new policies, which Katz called “giving handsomely,” as the Jewish state’s economy is allegedly doing very well.
Even if Israel would be able to secure loans on such a massive scale at this time of a worldwide crisis, it still currently lacks a budget.
Activists who speak out on behalf of restaurant owners, students and the culture industry released a text message mirroring those used by the Shin Bet (Israel Security Agency) to inform Israelis they must begin self-quarantine after being exposed to a coronavirus patient, saying: “We’re condemned to take on debts we could not repay as long as we live.”
A massive protest calling on the government to “give back the money” is due to take place on Saturday evening at Tel Aviv’s Rabin Square.