Finance Minister Avigdor Lieberman said last week that 2021 was "certainly the best year in the 21st century economically."
Indeed, last year broke some impressive records - in the field of exports, credit expenses, profits of retail chains, banks and more.
However, when it comes to small and medium-sized businesses, a completely different picture emerges.
This is at least according to preliminary estimates by the Israel Independent Chamber of Commerce, according to which in 2021 70,000 businesses will be closed - compared to only 35,000 businesses that opened.
This is a significantly higher figure compared to previous years.
For comparison, in 2020 about 38,000 businesses were closed, and in 2019 - 44,000.
It is important to note that the low number of businesses closed in 2020 is related to the economic aid that businesses received this year from the state, and that it was a "lifeline" for many of them - aid that ended mostly in 2021 and caused some businesses to close.
Business closed due to Corona plague, Photo: Gideon Markovich
It should also be borne in mind that some (small) of the businesses "shut down" their economic activity during the Corona crisis, but did not close their files with the tax authority in order to get the aid money from the state, and once it was over - the business closed.
Despite the reservations, it is still a disturbing number of businesses that have closed, and it is mainly due to the economic uncertainty in the economy.
Moreover, closing businesses and generally their low survival rate deter entrepreneurs from starting a business, thus explaining the relatively low number of businesses opened last year, despite the "economic boom" described by the finance minister just a few days ago.
The study by Dr. Ruby Nathanson, Lahav's economic consultant, also shows that 86.4% of businesses survived their first year, about half survived the fifth year and less than a third survived more than 13 years. Businesses in various industries also differ greatly in survival chances. In the health, welfare and welfare services industry, more than half of the businesses survive beyond 11 years, while in the hospitality and food services industry, less than a third of the businesses survive as early as the fifth year.
According to CPA Uri Barry, chairman of the Elliott Global Group, which advises small businesses, "The data from the study are difficult data that should worry decision-makers. Small and medium-sized businesses are the engine that drives the economy, and as such they need special attention and substantial financial support. Overcome the special difficulties of this period and allow their long-term survival and economic growth at the same time.Such a bleak figure of business closure shows that not enough has been done to help them.The corona is a very tough catalyst for their closure, so the tools that can be assisted in accelerating Taxation, financing, recruitment and reduction of manpower and oxidation of municipal costs. "
"Repeating past mistakes"
Closed businesses will no longer be helped by a compensation outline, and what about businesses that report dramatic declines in turnover?
In view of the high volatility of the recent period, the Treasury decided to wait until the end of the first quarter to decide whether assistance was required, to what extent and to whom.
This does not satisfy various employers' organizations, which continue to put pressure on the Treasury in order to formulate a compensation outline and provide certainty to businesses.
Uriel Lin, president of the Association of Chambers of Commerce, yesterday attacked the Finance Ministry's conduct on the issue of compensation for businesses.
He said, "The Ministry of Finance is repeating the mistakes of the past. Whenever an emergency situation begins in Israel, its basic position - we do not know how long it will last."
Lynn stressed that "from the end of January this year, the level of decline in revenue in each of the businesses in Israel should be examined, without any consideration of which industry it is, as was done in the Second Lebanon War. ".
In Lynn's view, adequate compensation would be considered "compensation for any business whose turnover decreased by 30% or more compared to the same period last year."
It also demands that workers be sent to the IDF for an interim period until the economy stabilizes.
Business closed due to Corona plague, Photo: Doron Golan - Ginny
The issue of harm to businesses reached the Knesset yesterday.
In a joint discussion of the Economics Committee and the Labor and Welfare Committee, the president of the Hotel Association, Avi Nissenkorn, warned: "If there is no assistance, we are facing a wave of layoffs."
The chairman of the Economics Committee, Michael Bitton, concluded: "We demand from the Treasury an action plan to deal with the damage of the Omicron to the economy within ten days." The chairman of the Labor and Welfare Committee, MK Efrat Reitan Marom: One in the back. "
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