Katz announces draft of coronavirus economic plan ready for PM

OECD: Israel expected to have 8% average unemployment rate by end of 2020

New Finance Minister Israel Katz (photo credit: FINANCE MINISTRY)
New Finance Minister Israel Katz
(photo credit: FINANCE MINISTRY)
Finance Minister Israel Katz rolled out the first hints of an economic plan that is meant to get Israel through the economic crisis resulting from coronavirus, saying he would present it to Prime Minister Benjamin Netanyahu on Tuesday.
The plan, which is “based on the principle of mutual aid,” will include improved unemployment benefits and a monthly living stipend for self-employed workers, many of whose businesses face demise, Katz said.
“The difficulties facing Israeli citizens as a result of the recent decisions made in accordance with the recommendations of the Health Ministry – closures and restrictions on business – are before me and are guiding my activities,” he said. “We are now formulating a comprehensive aid program for the self-employed and business owners, which I will present to the prime minister today.”
The plan would provide an answer for how to ensure that unemployed people and those who are self-employed receive a stipend for at least the coming year, including regular monthly ones, Katz said. In addition, assistance will be provided to businesses, depending on the size and the degree of harm.

“The program will incorporate many other components aimed at helping us to get through the coronavirus crisis and restore the Israeli economy to momentum and growth,” Katz said, adding that he was taking into account lessons learned from previous iterations of such programs.
The announcement by Katz came on the same day that the OECD released a report showing that Israel faces a seven-fold increase in unemployment.
Israel has an expected 8% unemployment rate for this year and 8.8% predicted for 2021, the 2020 OECD Employment Outlook report revealed on Tuesday.
The only country with a worse outlook is the United States, with an 8.5% leap in unemployment and 40 million people seeking work.
The OECD report is based on April’s figures, before the country entered the second wave of the coronavirus, meaning the actual numbers might be worse, with unemployment possibly reaching 10% or more, several analysts said.
On Tuesday morning, former Jerusalem mayor and current Likud MK Nir Barkat revealed a plan on social media, saying it could save 500,000 jobs if it is adopted. He said he had shared it with Netanyahu.
The plan consists of three so-called “anchors,” the first being the state offering a bailout of NIS 28 billion to 250,000 businesses to prevent them from shutting down.
Unlike current efforts to offer help, this time the money will reach the businesses “directly, without chasing after the bank,” Barkat said. He did not explain how businesses will be selected for the grant.
The other two anchors are a NIS 50b. incentive to encourage public consumption and the purchase of Israeli-made goods and a NIS 10b. grant to create new educational programs that would help train unemployed people to pursue new career paths.
Barkat suggested that the state should fund these programs but that they should be “under the responsibility of the employer” to ensure the future worker would have a job waiting for him or her when they finish their training.