ISRAEL AT WAR - DAY 149

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Barkat slams Treasury, presents rival emergency aid plan for war-affected businesses

Economy minister says Finance Ministry’s compensation plan is not comprehensive and does not provide full assistance for all businesses suffering losses during the Gaza war

Sharon Wrobel is a tech reporter for The Times of Israel.

Economy Minister Nir Barkat (center) speaks at a meeting of the Knesset Economy Committee, October 25, 2023. (Courtesy)
Economy Minister Nir Barkat (center) speaks at a meeting of the Knesset Economy Committee, October 25, 2023. (Courtesy)

Economy Minister Nir Barkat on Wednesday slammed the Finance Ministry’s wartime economic aid package and presented his own compensation plan to help businesses whose revenues have been dented during the war with the Hamas terror group.

Barkat’s proposal directly challenges the emergency aid plan introduced by Finance Ministry officials last week, which has come under scrutiny in recent days by regional council heads of communities in the south as well as groups of business representatives.

“Finance Ministry officials do not understand that we are at war,” Barkat lamented. “The ministry’s budget department presented a plan that doesn’t go far enough, and in my opinion, this is a mistake.”

“We need to present an in-depth and long-term plan,” he demanded.

Speaking at a Knesset Economy Committee meeting, Barkat called for expanding the geographic areas that are entitled to the emergency aid package. According to the Finance Ministry’s outline, businesses throughout the country that have been hurt during the ongoing war will receive compensation for loss of income, but only those within seven kilometers (four miles) of the Gaza border will be entitled to full compensation for war damages.

“I don’t see what the difference is between Ofakim, Sderot and Netivot…the main idea must be that severely damaged businesses need to receive greater support from the state,” said Barkat. “Our goal is for businesses to survive during the war and at the same time to encourage the continuity of employment of workers.”

The blackened facade of Liora Touito’s building in Netivot, Israel seen eight days after a rocket hit it, killing three people on October 7, 2023. (Canaan Lidor/Times of Israel)

Finance Ministry officials were invited to participate in the committee meeting but said that they could not attend due to reserve call-up duty.

Barkat elaborated that his plan would enable every business to employ part-time workers. On days an employee can’t work, the government would compensate businesses at a rate of 70%. His plan also proposes to increase the amount of grants for fixed expenses presented in the Treasury’s outline for businesses that have suffered losses.

Labor MK Gilad Kariv appealed to Finance Minister Bezalel Smotrich and Barkat to get their act together lambasting that on the 19th day of the war with Hamas, the government still hasn’t been capable of agreeing on a comprehensive emergency aid package for the economy.

Some 200,000 Israelis have been internally displaced in the ongoing Israel-Hamas war following the terror group’s October 7 massacre of 1,400 people in southern Israel, and amid escalating skirmishes on the Lebanon border in the north with terror group Hezbollah and allied Palestinian factions.

“It’s been almost three weeks since the war broke out and the finance minister and the economy minister continue to fight head to head at the expense of the citizens,” said Kariv.

Business associations, including the Israel Manufacturers’ Association, expressed in recent days that the Treasury’s plan is a step in the right direction, but lamented that it still leaves the plight of many businesses and hundreds of thousands of workers unanswered.

Batsheva Dahan shows the knife she keeps in her mobility scooter in case she encounters terrorists in Ofakim on October 11, 2023. (Canaan Lidor/Times of Israel)

Many employees could be finding themselves without pay as they are not managing to work due to a lack of childcare arrangements with many schools and kindergartens shut, a lack of protected spaces, or because of reserve duty, according to the manufacturers’ association.

“There is a crisis of trust between the business sector and the government,” said Uriel Lynn, President of the Federation of Israeli Chambers of Commerce. “Budgetary priorities need to be changed in order to first of all transfer funds to affected businesses and to residents who were evacuated from their homes.”

“Businesses must not close during the war, employers need to be able to pay salaries and workers need to earn a living,” Lynn continued.

Also speaking at the committee meeting, Manufacturers’ Association President Ron Tomer said he fully agrees with Barkat’s plan.

“Flexible employment is extremely important for businesses and the public as a whole,” said Tomer. “We are in a situation of economic distress and we need to create a broad and in-depth plan.

Similarly, Knesset Economy Committee chairman MK David Bitan said he supported Barkat’s plan and urged the government to discuss it.

“The plan provides the right economic envelope for the needs of the business sector but we still need to provide solutions for each sector separately,” said Bitan. “Businesses do not expect to profit during war, they expect to survive.”

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