Netanyahu presents massive economic assistance program

The Finance Ministry unveiled a massive new economic assistance program Sunday night, offering benefits to businesses and unemployed workers that were hurt by the effects of the coronavirus pandemic. 

“We will soon be the first country in the world to step out of the Corona and open up our economy,” Netanyahu said.  “But now, we have reached a decisive stage, and at this stage, we must do two things: First, continue to give more help to those affected, and second, to propel our economy forward by encouraging business and encouraging consumption. We do not lower the foot of the gas even for a moment.”

The announcement of the plan came as a surprise, and was greeted with skepticism by Netanyahu’s political rivals. “Neither the government nor senior finance officials saw the details of the plan, and for one reason – there is none,” tweeted Alternate Prime Minister Benny Gantz as the plan was announced. “It is very sad that Netanyahu is once again making promises that he will not keep, and leave alone hundreds of thousands of Israelis waiting for help.”

The plan was presented despite the objections of Attorney General Avichai Mandelblit that announcing such a large plan during an election season was inappropriate.

Finance Minister Israel Katz presented a nine-point plan to restore the economy.

First, companies whose revenues dropped by 25% or more during the coronavirus would get a grant of up to NIS 30,000, depending on the company’s size and scope of the damage. New businesses that started in 2020 would be entitled to a NIS 8,000 grant.

Second, Katz promised a new round of household grants of NIS 750 per adult, NIS 500 for each child up to the fourth child, and NIS 300 for the fifth child in a family and up.

Third, Katz presented a plan to encourage the return of employees to work. People who were unemployed more than 80 days in a row and return to work for a period of four months would receive a package more than doubling their unemployment benefits.

Fourth, a special grant for the disabled totaling NIS 500 million.

Fifth, the option for small businesses to spread out VAT payments over six months.

Sixth, the offer to businesses to delay the repayment of loans, and new loans available for at-risk businesses.

Seventh, unemployment benefits for self-employed workers who have not been considered eligible for such benefits until now.

Eighth, a reduction of regulations stifling business growth, and easier terms for business licensing.

Ninth, Katz promised reforms that would allow pension and insurance companies to invest in Israeli hi-tech and infrastructure, injecting new funds into the system.

Netanyahu rejected claims that the plan was just election economics, saying this is an essential need. 

“Is this an election economy because it helps Israeli citizens? Maybe the Attorney General wants to tell me how many vaccines I can bring? It does not occur to us to harm the health or livelihoods of our citizens because of elections.”

Netanyahu justified the expense of the program by comparing it to Joe Biden’s $1.9 trillion economic plan, which would cost 8.6% of GDP. That would correspond to NIS 122 billion for Israel, he said. He quoted US Treasury Secretary-designate Janet Yellen as saying that when interest rates are at an all-time low and you can borrow a lot of money at a very low price, “the smartest thing we can do is act big.”

Following the presentation, Yamina head Naftali Bennett expressed cynicism with the plan, saying “While you could do all these beautiful things, you chose not to spend a budget and prevented everything. If the people of Israel could feed their children the promises of this bad government, there would not be thousands of people hungry for bread now.”

Prime-Minister hopeful Gideon Sa’ar, head of the New Hope party, responded to the announcement by announcing that he has his own five-point plan for economic recovery, with the first goal of reducing unemployment.

The new plan comes on the heels of several other economic plans that have been launched in recent weeks. Earlier this month, Knesset approved a plan called “From brakes to growth” to provide assistance with special grants and property tax payments for small businesses and freelancers.