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Netanyahu takes fire from coalition partners, Treasury over virus handout plan

Prime Minister Benjamin Netanyahu’s new financial aid package for the economic crisis set off by the coronavirus pandemic came under fire on Wednesday after Netanyahu announced the proposal.

Criticism came from Finance Ministry officials and the premier’s coalition partners and mostly centered on the plan’s call to disburse money to all Israelis, regardless of income or whether they were hurt economically by the government-mandated restrictions to contain the virus, and for its high cost.

The plan will see couples with one child receive a one-time payment of NIS 2,000 ($583), which rises to NIS 2,500 ($729) for those with two children, and NIS 3,000 ($875) for those with three or more. Households without children would receive NIS 750 ($218). It is expected to cost NIS 6 billion ($1.75 billion).

Netanyahu is facing a tide of criticism over his response to the financial crisis as new infections in Israel rise at an alarming pace.

The Blue and White party, which is part of Netanyahu’s government, criticized the plan for failing to target those who are in need.

“Any economic support for Israeli citizens is welcome, but it needs to be anchored in a responsible and long-term plan,” Blue and White said in a statement.

It added: “Regarding the grants, Blue and White supports directly transferring money to citizens, but this needs to be done with an emphasis on those whose livelihoods was hurt… we’ll deliberate this later in the government.”

Blue and White MK Eitan Ginzburg was more pointed in his criticism.

“There’s no logic, neither economic nor social, in giving out the same amount of money to everyone when it’s clear that there are those who desperately need it and those who can get by without it,” Ginzburg tweeted.

He said he trusted Blue and White ministers to push “to fix this illogical distribution [of funds].”

Strategic Affairs Minister Orit Farkash-Hacohen of Blue and White said, “We cannot pour out an ocean of money… without distinguishing between rich and poor. This is not a plan. This is populism.”

Netanyahu, nonetheless, said he was confident Blue and White leader Benny Gantz would back the plan.

MK Moshe Gafni of the ultra-Orthodox United Torah Judaism party and chairman of the Knesset Finance Committee also reportedly expressed frustration with the plan.

“I don’t understand why we need to give money to rich families. Why not give it in a way that differentiates?” Gafni said, according to Hebrew media reports. Gafni’s faction is a part of Netanyahu’s governing coalition.

Communications Minister Yoaz Hendel of Derech Eretz called for “compensation for those that took a hit. Not widespread compensation. Business owners, self-employed people, the unemployed and vulnerable families need to get money. Working families do not.”

Welfare Minister Itzik Shmuli, a member of the center-left Labor Party, said the plan neglected 80,000 business owners that needed support and lacked emergency funding for the disabled, children at risk and the elderly.

Senior officials in the Treasury, including director Keren Terner Eyal, opposed the plan ahead of its release, likening it to “throwing suitcases of money that we don’t have into the sea,” according to Channel 13.

The head of Lahav, Israel’s Chamber of Independent Organizations and Businesses, similarly voiced criticism.

“It is a surreal decision to give money to people who don’t need it, instead of people who are crying out. The self-employed sector is bleeding. Enough with the cheap populism,” Roee Cohen was quoted as saying by Channel 12. “The streets are on fire. We need real solutions.”

A meeting between finance officials on the proposal ahead of its release devolved into a screaming match, with yelling heard in nearby offices, Channel 12 news reported.

Opposition MKs also lashed the outline after its release.

Opposition leader Yair Lapid said he would donate the grant allotted to him.

“The salary of MKs has not been hit so there’s no reason for this grant. Those who can afford it should donate the grant to those who really need it,” Lapid said.

MK Ayman Odeh of the Joint List called for further protests, saying, “It turns out that for every 5,000 demonstrators at [the premier’s residence] every citizen will receive NIS 750. Let’s make it to a million.”

Tamar Zandberg of the left-wing Meretz party praised the plan, saying, “The grant is right and it’s right that it’s universal. It will give money to families to spend in the shrinking economy and at businesses that need it. Those who ‘do not need’ are a very thin layer, and creating tests for receiving the grant will cause more harm than good for everyone.”

“This is not a replacement for investment programs for industries that were hurt like tourism, transportation, culture and of course social services,” Zandberg added.

Netanyahu announced the plan at a press conference with Finance Minister Israel Katz at his office in Jerusalem.

He called on politicians to quickly support the plan, saying he was sure the whole government would approve it and expressed hope it would not prove necessary to anchor it in new legislation, since that would take time.

“We need to get the wheels moving and make sure nobody falls between the cracks,” he said.

He also appealed directly to Israelis who have faced financial difficulties amid the pandemic. “I hear your distress. You’re not alone,” he said.

The funds are to come from social security payments and therefore likely won’t require formal legislation to be approved, but rather only ministerial support.

Asked about the Finance Ministry’s opposition to the plan, Netanyahu was dismissive.

“This is not the first time I’ve argued with bureaucrats. Many bureaucrats argue with my requests, but in the end the responsibility is mine,” he said.

Netanyahu, a former finance minister, said the proposed grants were “essential” and that he did not need “lectures” on the economy from the Finance Ministry.

Netanyahu said he was also working on “a long-term plan for the safe reopening of the economy, so we can deal with the coronavirus for all long as necessary — six months, a year, even more than a year.”

He said he wasn’t ignoring the country’s growing budget deficit, but that the extreme uncertainty about the future required the government to take immediate action. “We don’t know what will happen to the global economy,” he said.

As of June 30, Israel’s deficit stood at 6.4 percent of GDP, or $16.9 billion, according to the Finance Ministry.

Earlier Wednesday, self-employed Israelis began receiving funds promised them as part of an aid package last week unveiled by the premier and finance minister.

While Netanyahu pledged to grant up to NIS 7,500 ($2,190) to self-employed workers hurt by the virus restrictions, many reported receiving significantly less. At his press conference, Netanyahu said 380,000 people got an average of NIS 4,700.

The rollout of the new aid plans comes amid growing discontent over the government’s handling of the COVID-19 outbreak and the resulting economic crisis, and as Israel appeared poised to return to some kind of nationwide lockdown due to the continued rise in new infections.

Health Minister Yuli Edelstein said Wednesday that Israel could return to a nationwide lockdown if immediate action isn’t taken to contain the virus.

Channel 12 reported that despite Edelstein’s warning, the Health Ministry was preparing an intermediate stage of closure that could be imposed before a total lockdown in a bid to preserve some economic activity.

According to a Channel 13 poll released on Sunday evening, 61 percent of Israelis disapprove of Netanyahu’s overall handling of the pandemic, and 75% are unhappy with how his government has handled the economic fallout of the health crisis. Only 16% said that they were satisfied with the government’s economic response.

Over the weekend, thousands of people descended on Rabin Square in Tel Aviv to protest the government’s handling of the economic crisis and what they say is insufficient aid offered to small business owners and professionals in the hard-hit entertainment and hospitality industries.

As of Wednesday, 853,843 were out of work, amounting to an unemployment rate of 21%, the Israeli Employment Service said.

Header: Self-employed Israelis block a road in Tel Aviv during a protest calling for financial support from the government, July 11, 2020. (Miriam Alster/Flash90)

Source: TOI Staff