• Business

• news

"Israel is one of the worst countries in the Western world to help with the Corona crisis"

Avishai Avrahami in a post he published: "Although I do not really understand politics, but I am really good with numbers, and the truth is that Israel is one of the worst also in how much it planned to give and not only in the level of execution

Tags

• wix

Globes service

Friday, October 30, 2020, 2:35 p.m.

• Share on Facebook

• Share on WhatsApp

• Share on general

• Share on general

• Share on Twitter

• Share on Email

0 comments

• Trump held an election rally in Nebraska 28.10.20

• Gimzo: The Kaverna cabinet has a green light to move on to the easing round ...

• Netanyahu in a speech 40 signatures in the Knesset: "The opposition is wasting ...

• The corona angle video leads to starvation

• Orit Crudo Tali to El Manpower

• A rabbi from Bnei Brak calls for the introduction of Shabbat early for Trump

• Italy: Corona demonstrations expand, clashes with police ...

• Cabinet approves peace agreement with UAE ...

• Danny Vidislavsky

• Business owners demonstrate and burn goods in Tel Aviv: ...

In the video: Netanyahu refers to the outline of returning to school and says that the opening of stores will be careful (Photo: GPO, Walla! NEWS)

Avishai Avrahami, CEO of Wix, posted on his Facebook page on Thursday a long reference to government support for business during Corona. In coordination with the company below is the full post:

We have a little baby and every evening we go for a walk. It closes and it's very very sad. Every time I tell people what I see, I hear the following answer: "The Israeli government gave these businesses aid like any other country in the world, didn't it?" Or "I saw in the newspaper that the government was very generous." I'm really bad at politics, but I'm really good at numbers, so I decided to share the full truth with you.

Bottom line: Israel is one of the worst countries in the Western world in helping its citizens in the Corona crisis. The Western world has given an average of about 10 times that of Israel.Israel

is the worst even if you look at how much the country has planned to give and not just the execution, and frankly, if you look at the local damage from the corona compared to government aid, we will not be the last, but probably the last, no Only in the Western world, but perhaps in the world.

(Promoted Content)

The weekly tip: choose the perfect bedroom for you

In collaboration with Shomrat Hazorea

To the full article

Expenditure from the GNP:

• Israel: Planning 4.49%, Execution 3.48%

• USA: 19.47%

• Germany: 30.98%

• United Kingdom: 16.65%

• Per: 12%

• Thailand: 2.53%

In the first place it does not look good.

Avishai Avrahami (Photo: Yonatan Blum)

See?

5 to 10 times more than Israel.

Even countries like Peru are more generous to their citizens than the State of Israel.

If you do not believe me - go over the numbers yourself.

We will soon go over some calculations I made, but in the meantime it is important that you know that my source is the Israeli government itself.

The cost of rebuilding everything that was destroyed would be enormous

So, I'm sad.

Not about myself (luckily Rabbi Wix allows a lot of businesses to move online and our situation is good) but for two reasons: because I can not understand how people can call themselves "leaders" without caring about people who worked all their lives to build a business and support their family and now business collapses In front of their eyes.

How can you do nothing, I just can not figure it out.

Because people have paid taxes all their lives under the promise that one day, when they have to, the government will be there for them and that did not happen.

What has happened is that businesses are collapsing because the government has ordered businesses to close their businesses (for reasons that are probably justified), but this is exactly the moment when the government had to put a hand in its pocket and help.

Instead, the government saves us money, money that is not hers but ours, and in its stinginess it collapses the public.

By the way, the Israeli economy was in a better position than most of the economies of the Western world.

The Israeli government could easily have taken steps that other economies have taken and it has not done so.

And now, the cost of rebuilding everything that was destroyed will be enormous.

Sorry for the emotionality - here are the numbers.

I did a simple comparison, I tried to compare apples to apples as much as possible, and here they are in front of you below.

Note that the data are not normalized by population size.

There are three types of actions the government has taken to deal with the crisis:

• 1. Money that the state distributes to various audiences out of the state cash flow

• 2. State-guaranteed credit

• 3. Deferral of taxes

"Support close to 0": Independents demonstrate (Photo: Dana Yarkatzi)

• Trump held an election rally in Nebraska 28.10.20

• Gimzo: The Kaverna cabinet has a green light to move on to the easing round ...

• Netanyahu in a speech 40 signatures in the Knesset: "The opposition is wasting ...

• The corona angle video leads to starvation

• Orit Crudo Tali to El Manpower

• A rabbi from Bnei Brak calls for the introduction of Shabbat early for Trump

• Italy: Corona demonstrations expand, clashes with police ...

• Cabinet approves peace agreement with UAE ...

• Danny Vidislavsky

• Business owners demonstrate and burn goods in Tel Aviv: ...

In the video: Self-employed people burn goods in Tel Aviv demanding the opening of street shops (Photo: Dana Yarkatzi)

Before I go into depth on the issues of credit and grants (cash flow), I want to close a small corner regarding tax deferral.

Given that tax deferral does not give citizens money, we will have to pay these taxes later, I do not think we should count the amount.

It may be possible to count the interest rate, but given the fact that the interest rate in the economy today is close to 0, the value of the benefit is - close to 0.

We will move on to loans: what we see are loans given by financial entities, money that the state does not give to citizens but only guarantees it in case the business cannot repay the money.

The money goes to two main audiences: large companies and small and medium-sized businesses.

The plan is similar to the US PPP plan, with some significant differences: In the US the government gives a guarantee for 95% of the value of a loan given to a business.

In Israel, the guarantee is only in the 15% region.

This is a super significant difference - the banks in Israel are not really happy to distribute the money on these terms.

In fact, only 43% of the money went to businesses.

In addition, the Americans decided that if a business uses 60% of the money to pay salaries or rent - the loan becomes a grant.

Thus, the employees of those businesses did not lose their jobs (because businesses had how to pay them) and the cost did not fall on the shoulders of the government, as happened in Israel.

In this structure both the bank is happy to give the money and the business is not afraid to use it.

No wonder the American show is already in the second round, which is also sold out.

So after we understand that, let's do some calculations: total loans (without tax deferral) 37,657 - 12,000 = 25.6 billion shekels.

The government guarantees 15% or less of this number (remember that in the US it is 95%?). That is, in the worst case where all businesses do not return all the money - 25,657 * 15% = NIS 3.8 billion

but, remember that the percentage of use of the route is only 43% of that guarantee is not enough? the amount shrank to $ 1.6 billion. and this happens not because there through a broker cruel and evil (the bank), but because of that 15% is really a joke and a serious body was not accompanied by money in these numbers.

know what The assumption that all businesses do not return all the money is unrealistic. Let's assume that 50% of them fall - the theoretical expenditure of NIS 800 million. That's nothing, it's a miserable sum in the face of the crisis that befell us

another small point before I get to the main point. Health: There is no government in the world that has not added resources to its health budget to deal with the situation and improve the local health infrastructure. I decided not to include these amounts in the overall calculation (Israel spent NIS 12 billion) because health systems look and behave differently in different countries. Including this clause, Israel would still come last place per citizen. Even the US gave more than Israel per capita in this clause.

Only 0.28% of GDP

Now, to the grants.

A very significant expense item for us and in general: we will define grants, money that the government gives to various audiences without expecting to get it back.

The total amount of the program is NIS 11.8 billion.

But in total, the state spent NIS 6.314 billion.

About half went out on property taxes, but if we are fair not to take tax on a property that the government has instructed you not to use it is not really a grant.

A grant is an amount you actually give.

In total - it is about 2.57 billion shekels. We are left with 3.73 billion of real grants. Sounds low, right? It is very low. How low? NIS 3.738 billion is $ 1.068 billion. That is, if Israel's GDP is $ 370 billion The total aid provided in Israel is a legendary sum of 0.28% of GDP.

If you think 0.28% is low (you are right, it is really low), get another calculation, this time per capita: $ 1.068 billion for a share to 8.8 million people = $ 121 per person,

100 times less than what the German government gave.

The last part I will dwell on is the application model - grants for people who do not work.

The state spent NIS 15.4 billion on this item.

I personally think (as do quite a few economists) that the path the country has chosen to take on this issue has been less successful than other countries.

In Germany, for example, the government has allocated $ 424 billion for employers to pay salaries to workers.

Thus, both the work continued and the workers were paid.

In the US, as part of the PPP if you spent 60% of the loan on salaries and rent you received a grant - that means you had a very high motivation (motivation of 40% of the amount) to continue to employ their employees.

• But even if we assume that the conditions are completely equal - the amounts of the grants are very different:

• Germany: $ 430 billion, which is 11% of GDP or $ 5,180 per person

• US: 1.75 trillion, which is 8.75% of GDP or $ 5,335 per person

• Israel: $ 5.4 billion out of $ 370 billion (or $ 613 per capita) GDP - a staggering 0.11%.

• Exactly 100 times less than what the German government gave, and 80 times less than what the US gave.

Distributed quite a bit of money: just not necessarily to the right people

But hey, what Israel did do is pour money into the bank accounts for all of us.

Israel gave two grants: $ 2.57 billion (NIS 9 billion) in the first round and another round of $ 1.88 billion (NIS 6.58 billion) last August.

A total of $ 4.45 billion, about $ 500 per person. That's not a bad amount at all.

The US also gave personal grants to bank accounts, $ 300 billion to 328 million citizens = $ 910 per person.

Germany only gave to citizens who needed money, so their total personal grants were smaller, about $ 50 per person (I distributed to all citizens, not those who actually received).

But to be fair, what Germany did is probably much more successful.

After all, I also received a check, and I do not need a check.

I donated the money (and more of it) because it makes no sense to distribute money to everyone indiscriminately.

Thanks, but I have enough money.

And yet, I give it to them.

The State of Israel has distributed quite a bit of money, even in an international comparison, simply not necessarily to the right people.

And even if you think that the state has taken a justified step here and that is the essence of Israeli economic policy, it does not really matter.

We have the budget to support our citizens in a measured and rational way

The numbers tell us that Israel planned to divide 4.49% of GDP and actually distributed 3.48%.

And this is while the rest of the Western world distributed much (much) higher amounts. The closest neighbor I found is Thailand, a country that barely suffered from corona and significant percentages of its economy And fisheries, which have never stopped because of the plague. So in relative terms, we are in a bad situation even from Thailand. We are not a third world country and we have the budget to measure and rationally support our citizens as a first world country, we did not do it, and I do not understand why.

I want Also ask for something, if you know one of those leaders, ask them, please, save the business, they really deserve more, so do yourself a favor, do not invent the wheel.Just copy from others, you will see true leadership, really soon it is too late.

• Share on Facebook

• Share on WhatsApp

• Share on general

• Share on general

• Share on Twitter

• Share on Email

0 comments