The long-delayed launch of Israel's "unprecedented" NIS 80 billion financial rescue plan was marked with little fanfare beyond the Finance Ministry and the Prime Minister's Office.
"The program presented today is the largest and widest in scope that the Israeli economy has ever seen," said Finance Minister Moshe Kahlon in his political swan song, presenting measures valued at 6% of GDP.
What explains the lack of enthusiasm following the presentation of the plan? For many in the business sector, of course, there is little appetite to celebrate at all. Others, looking at measures implemented by other governments, are green with envy.
Even before its publication, self-employed workers rallied in Jerusalem against its leaked contents. Individuals whose income – their livelihood – has 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. Even for those eligible to receive the maximum sums, it is unlikely to keep them breathing for much longer.
A combination of tools worth NIS 40.7b. ($11.5b.) aim to offer a financial lifeline for struggling businesses, including low-interest loans; compensation; the cancellation of municipal tax; deferrals of VAT, social security payments and utility bills; and tax rebates.
For many businesses, whose revenues have almost ceased altogether, loans are simply not an option. Even with attractive terms, including repayment starting only next year, the recovery process is likely to take some time and many will be afraid they will default on their loan.
While no government is able, or needs, to compete with the United State's $2.2 trillion stimulus plan, Israeli businesses and workers are likely to crave levels of support provided abroad. Announced long after most developed economies published financial aid packages, many companies are running low on cash.
In addition to direct payments to all tax-paying American citizens, the US stimulus package launched last week offers unemployment benefits to the self-employed, independent contractors and so-called gig workers. Jobless workers will receive an additional $600 per week for up to four months, on top of current state benefits.
Portions of loans provided to small American businesses may be partially or even fully forgiven if used to pay workers, utilities, mortgage and rent. In total, the US stimulus could be worth some 10% of GDP.
German Chancellor Angela Merkel rolled out a stimulus package worth some $810b. on March 25, including $660b. for business loans. The plan is worth approximately 4.5% of national GDP.
German businesses employing up to five workers are eligible for a $9,900 grant, and companies employing 10 workers will receive $16,500. Germany's finance minister Olaf Schloz said there is "no upper limit" on the amount of loans available to businesses, the Financial Times reported.
As early as March 11, British Chancellor of the Exchequer Rishi Sunak announced a $37b. stimulus package, and subsequently rolled out a $410b. business loan fund – equivalent to 15% of GDP – one week later. In a particularly generous move for workers on unpaid leave, the government will pay businesses grants of up to 80% of workers' wages – capped at $3,100. Self-employed workers will be eligible for taxable grants worth up to 80% of profits, with a similar cap.
Small businesses with fewer than 250 employees are eligible for $2.5b. in sick pay rebates and a $3,700 grant for very small firms, in addition to government-secured loans and the abolishment of commercial tax for retailers until the end of the year.
Of course, measures cited above are among the most generous worldwide, but business owners and self-employed workers worldwide would not want anything else. No matter the nature or scope of the financial assistance, key to its success is effective implementation.
According to Finance Ministry data presented to the Knesset Finance Committee prior to the presentation of the financial aid package on Monday, just 25 out of almost 3,500 loan applications submitted by business owners had been approved.
For Israel's small businesses and self-employed workers – the key growth engine of the nation's economy – to even tread water and open their doors again after the current crisis, effective processes must be put in place.