Netanyahu admits lackluster support for small businesses amid crisis, vows fix
PM says Israel can learn from American model of direct allocation of funds to those hit by economic slowdown caused by the coronavirus
In a Sunday video conference call with representatives of self-employed Israelis and small businesses, Prime Minister Benjamin Netanyahu admitted that mistakes had been made in providing them with financial assistance during the coronavirus pandemic, and said that a new model would be adopted whereby funds would be provided more directly.
“I think we have done a lot of things better than many countries in the world — the results bear that out — but there are a few things we can learn,” he said. “The main thing we can learn from the United States is that when they allocated funds, they also handed them out far more efficiently.”
His comments came against a backdrop of growing protests by self-employed Israelis and small business owners, many of whom have received little to no financial support during the crisis.
“In Israel,” Netanyahu continued, “financial assistance was subject to various criteria and processes, either via the banks or the bureaucracy or both. What we are going to do is to change this drastically by adopting the American model that hands funds over in a more direct way.
“What we have to do is to make sure that funds that have already been allocated are distributed and that you receive them as soon as possible. That is what is going to happen this week and next week.”
Israel has so far granted the self-employed a one-time payment of up to NIS 6,000 ($1,700) to help them weather the pandemic and last week approved a plan including a second stipend equaling up to 70 percent of their regular income, up to a maximum of NIS 10,500 ($3,000).
Receipt of the funds is dependent on proving loss of income.
Some who are eligible have also signed up for unemployment benefits with the Israeli Employment Service, which are based on previous earnings, though there have been many reports of the actual payments being incredibly low, sometimes amounting to only several dozen or several hundred shekels a month.
Small businesses have also been promised government assistance with bank loans, but many say these have proven very hard to secure.
On Saturday night, thousands of self-employed and small business owners took part in demonstrations throughout the country demanding greater government support. Smaller protests have been ongoing on an almost daily basis.
While the government has set out NIS 80 billion (approximately $22.5 billion) to support the economy through the crisis, only some NIS 4.6 billion has so far gone to small businesses, according to a Channel 12 news report Saturday.
Of 48,000 requests by small businesses for support, only 14,500 have been approved.
Meanwhile most of the funds, the report said, are going to large businesses which can more easily secure loans from banks without the need for government assistance.
With the economy at a near-halt, jobless figures spiked to over 1.2 million in April, bringing the unemployment rate to an unprecedented 27 percent, from below 4% pre-coronavirus.
