Can incompetence save Israel’s small businesses?
On Sunday evening this week, Israel’s Prime Minister and the Minister of Finance held a press conference to launch a 15 billion shekel (approx US$4.5 billion) rescue plan, targeting households and small businesses.
The package includes a series of grants, the delaying of statutory payments like VAT, the deferral of loan repayments, and more. Ostensibly, there is much to be commended here. Although you are left wondering why this has taken 10 months to emerge!
And here in lies the rub. According to Israel’s Attorney-General, because the handouts have been delayed so long and appear to coincide with the onset of a general election – scheduled for March 23rd – large parts of the plan will probably be deemed illegal.
If that was the only problem with the ideas, maybe the dynamic duo might have got away with it? Maybe, but there is worse to come.
- It appears that core elements of the Ministry of Finance were not involved in the formulation of the project. This was denied, strangely by the cabinet secretary.
- As for the Bank of Israel, the Governor is reported to have received a copy of the plan within the hour prior to its release. He was later to reject it, as failing to concentrate on growth stimulation.
We know that the standard of living in Israel fell by over 20% last year, particularly amongst the nebulous middle classes. We know that there has been no budget for three years, as we enter 2021, which endangers the survival of projects, designed to bolster the economy. And we know that the hospitals (for years) are short of beds and lack qualified medical teams.
There again, as one commentator observed with an eye on that date in March, hospitals don’t have a lot of votes.
As for the small business sector, what is required as much as money is clarity of planning, direction and hope. That means a full budget, which a Netanyahu-led government has been unable to deliver for years.