Since the war situation is liable to continue until the end of the year, and perhaps even beyond, it is important that the outline approved by the government undergo a number of improvements and accuracies • These are the things that decision makers should pay attention to
Despite the many criticisms from the business sector, the government approved tonight (between Wednesday and Thursday) the compensation outline for businesses following the "Iron Swords" war. The outline will be put to a vote in the Knesset plenum next week, and then it will reach the Finance Committee, which can still introduce amendments and changes.
The prevailing assessment is that the war will not end in the coming week, and since the war situation may continue until the end of the year and even beyond, it is important that the outline undergo improvements and accuracy. Despite the obvious need to maintain budgetary discipline these days, some of the existing holes in the outline are crying out to the sky – and decision makers should pay attention to them.
Finance Minister Smotrich, yesterday: "The economy is strong - we will support the home front and the front generously but responsibly" // Photo: GPO
Senior citizens have been left behind – and are not receiving a response. Quite a few citizens of pension age, that is, those aged 67 and over, continue to work in order to supplement their income, and experience shows that they are usually the first to be placed on unpaid leave. In such a case, they will not be entitled to unemployment benefits, since they are not of working age and do not have a special solution according to the outline.Hundreds of thousands of people will be placed on unpaid leave, and contact between them and their employers will be lost after the war. Despite the clear need presented by the entire business sector for a flexible employment model, so that the employer will continue to employ the employee, the Ministry of Finance did not learn a lesson from the COVID-19 pandemic, and this model was not introduced this time either. This is despite the fact that this model has been introduced in many other developed countries, such as Germany and the United States.The reason for this is that the Ministry of Finance is concerned about hidden unemployment – that is, that employers will "inflate" the employee's working hours. In addition, the Ministry of Finance does not want employers to continue to "retain" workers unnecessarily, at a time when there is a severe shortage of workers in the economy (for example, in agriculture, construction, nursing, etc.).
In the current situation, many employers (restaurants, banquet halls, the tourism industry, garages, etc.) that put employees on unpaid leave will find it difficult to recruit them after the war, when they return to activity. The business sector says that at least in some industries it is important to implement a flexible employment model.
Minister of Finance Bezalel Smotrich (archive), photo: Paul Jonathan Zindel/Flash90
Some of those placed on unpaid leave will not be entitled to unemployment benefits because they do not meet the conditions or will be entitled only to some days of the month. Although the state has relaxed the conditions of eligibility for unemployment benefits by reducing the number of months of work required for eligibility, it has not addressed the number of days of eligibility.The state of the construction industry may continue to deteriorate. Despite the fact that the construction and infrastructure sector hardly works, and despite its importance to the economy, the approved outline does not offer a unique solution to the problems of the industry, whose revenues are measured differently from what the outline proposes, and which suffers from a severe shortage of workers.According to yesterday's Central Bureau of Statistics estimates, 62% of construction businesses are on the verge of closing. The collapse of construction companies is going to endanger the banks and the financial system, which in turn will hurt state tax revenues. The construction industry should receive special attention in the outline.
In the incoming and outgoing tourism industries, inputs without VAT were excluded, despite the fact that a significant portion of the industry's inputs are excluding VAT – airline tickets, car rental, etc.Seasonal businesses (producers, sports centers, gyms, etc.) do not have a solution in the outline. For these businesses, annual income must be taken into account and not necessarily bi-monthly – there is no special solution in the outline.Businesses in Sderot (archive, places photographed have no connection to information), Photo: Yehuda Peretz
Growing/new businesses, which have seen rapid growth over the past year, will not be able to report a decline in turnover in October compared to October of last year.The diamond industry, which employs about 40,<> workers, remains outside the framework, unlike it was during the coronavirus period.Businesses report on a cash basis – for example, self-employed/dealers who received income in October for July will not see a decline, and therefore will not be eligible for the grant, if they were completely closed in October.Wrong? We'll fix it! If you find a mistake in the article, please share with us
