Amid rising unrest, cabinet approves virus financial relief package
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Amid rising unrest, cabinet approves virus financial relief package

Plan, which requires Knesset approval to change relevant laws, will extend unemployment benefits, provide grants for businesses and self-employed

Prime Minister Benjamin Netanyahu (center) and Finance Minister Israel Katz (right) meet with representatives of self-employed Israelis and small business owners at the Prime Minister's Office in Jerusalem, July 10, 2020. (PMO)
Illustrative: Prime Minister Benjamin Netanyahu (center) and Finance Minister Israel Katz (right) meet with representatives of self-employed Israelis and small business owners at the Prime Minister's Office in Jerusalem, July 10, 2020. (PMO)

The cabinet on Monday approved Prime Minister Benjamin Netanyahu and Finance Minister Israel Katz’s economic relief package for businesses, the self-employed, and workers impacted by the coronavirus outbreak, which saw the country’s economy grind to an almost total standstill.

There has been widespread anger from various sectors of the economy whose members say the government is not doing enough to help them weather the crisis, accompanied by outrage over the alleged misdirection of financial aid and the bureaucratic complexities of obtaining assistance.

Among the measures included in the relief package are an extension of eligibility for unemployment benefits through June 2021, monthly “adjustment grants” of NIS 4,000 ($1,163) for workers above the age of 67 who lost their jobs due to the outbreak through the end of 2020, and a bimonthly grant of up to NIS 15,000 ($4,363) for self-employed businesses hit by the pandemic, also through June 2021.

“We are continuing to work to bring further help, jobs and money to the country’s citizens,” Netanyahu tweeted after the approval.

Ministers also approved a NIS 24 billion expansion in the 2020-2021 budget to pay for the package, the Prime Minister’s Office and the Finance Ministry said in a joint statement.

An immediate support stipend has already been paid out to some 300,000 self-employed people and will be deposited in their bank accounts in the coming days, the statement said. Only a third of those who qualified for the stipend will get the maximum sum of NIS 7,500 ($2,180) a month. The total cost of the payout was NIS 1.8 billion ($523,636).

Self-employed Israelis protest at Rabin Square in Tel Aviv, calling for financial support from the Israeli government in the face of the coronavirus pandemic, on July 11, 2020.(Miriam Alster/Flash90)

Many of the plan’s proposals involve changing laws and therefore the package still requires Knesset approval, which will be sought “immediately,” the statement said.

Other elements of the package grant an extension of expenses reimbursement for businesses whose revenues suffered a hit of at least 40%, by increasing the maximum grant to NIS 500,000 ($145,450) per round.

IDF veterans who were discharged in the past five years will be allowed to withdraw up to half of the discharge deposit they receive, and use it for any purpose. Currently, withdrawals can only be made for specific purposes such as education, starting a business, or getting married.

In addition, tax exemptions will be granted for those withdrawing from their trust funds.

Ministers also approved setting up a task force led by the directors-general of the Prime Minister’s Office and the Finance Ministry to improve employment rates. Unemployment in Israel is at some 21% — or 850,000 people — and is rising, as restrictions imposed amid record daily coronavirus infections further batter the economy. Unemployment at the height of the pandemic reached over 25%, with over a million Israelis out of work.

Should unemployment drop to below 10%, then the unemployment benefits extended until June next year will be cut to 75%. If the figure goes below 7.5%, the extension will end within 30 days, the statement said.

A closed cafe on Nachalat Binyamin Street in Tel Aviv, on April 14, 2020. (Miriam Alster/ Flash90)

The full government economic recovery program stands at some NIS 100 billion ($28 billion).

Monday’s approval came in the wake of a weekend protest against the government’s handling of the financial impact of the virus, with thousands gathering in Tel Aviv for a rally that later turned violent, as demonstrators clashed with police.

People of varied economic backgrounds and sectors were at the demonstration, including owners of hard-hit small businesses, freelancers and self-employed, members of the entertainment industry and of the restaurant and hospitality sector, as well as university students.

After the the noisy but peaceful demonstration ended, hundreds began blocking roads in the area and 19 were arrested.

Netanyahu had met with representatives of small businesses the day before the protest rally. His office described the three-hour meeting as “positive,” while a lawyer with the business owners called it “charged.”

Israel imposed a broad lockdown starting in mid-March, allowing only staff deemed essential to go to work and banning public assembly. Places of entertainment were closed, hitting the leisure industry hard. The measures brought down virus infection rates, but ravaged the economy.

Facing public and economic pressure, the government eased restrictions in late May. Some restrictions have been gradually reimposed this month, as the number of new COVID-19 cases has reached new highs of over 1,000 a day.

While salaried workers sent on furlough received unemployment benefits, the self-employed say that most have been waiting months for promised government aid to reach them.

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