Plan to Give COVID Grants to Israeli Citizens Has Not Advanced

Nati Tucker
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Finance Minister Yisrael Katz and Prime Minister Benjamin Netanyahu
Finance Minister Yisrael Katz and Prime Minister Benjamin NetanyahuCredit: Gali Tibbon / AP
Nati Tucker

Could it be that the plan to distribute a coronavirus grant to every citizen was merely part of an election campaign?

Most of the clauses of the plan that Prime Minister Benjamin Netanyahu and Finance Minister Israel Katz presented three weeks ago, titled “Nine steps toward economic recovery,” are not in advanced working stages at the Finance Ministry.

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With the exception of two clauses, neither of which relate to the pandemic response, most of the clauses haven’t even been presented to Attorney General Avichai Mendelblit for approval.

TheMarker has learned that the finance minister has only been presented with a preliminary document listing the steps necessary to implement the plan. Most of the clauses haven’t even entered the preliminary discussion phase with the Finance Ministry’s internal legal advisor.

Mendelblit was supposed to approve the next stage.

Sources speculate that the delay stems from a consensus that both Mendelblit and the Finance Ministry legal adviser won’t approve most of the clauses since they call for illegitimate financial handouts to citizens during the run-up to an election, which is scheduled for March 23.

Netanyahu and Katz intend to discuss the grants plan during the next cabinet discussion, but because its clauses haven’t actually been formulated or submitted for legal approval, even though the cabinet will be entitled to discuss the matter, it won’t be permitted to make decisions or decide to implement it.

Netanyahu and Katz presented the plan to give grants as a response to the coronavirus pandemic at a press conference on January 24. The government’s technocrats were not aware of the plan prior to its media release. The plan’s nine clauses would cost an estimated 15 billion shekels ($4.6 billion).

At the time, the plan was described as election economics since it includes distributing money inefficiently and regardless of financial need. The Bank of Israel also said it opposes some of its clauses.

The problematic clauses included another proposal to give every citizen a grant – in this case, 750 shekels for everyone in the seventh decile and below for household income, regardless of whether they were impacted by the coronavirus crisis. It also called for handing out 500 shekels per child, even to those families where the parents’ income is in the top 10%. This was later limited to children whose parents were below the seventh decile.

Attorney General Avichai MendelblitCredit: Emil Salman

Other clauses called for significant grants for unemployed people who returned to work and for businesses that sustained damage.

Even before the plan’s release, Mendelblit called on the government to receive his approval for any economic plans over concerns of illicit election economics.

At the time, sources speculated that Netanyahu and Katz announced the plan as a political ploy. The assumption was that should Mendelblit approve it and the money be distributed, Netanyahu and Katz would benefit, and if he didn’t approve it, they could blame him and other “clerks,” as part of Netanyahu’s campaign against bureaucrats.

What’s being approved?

So far, only two clauses have been submitted for Mendelblit’s approval. The first one is a one-off grant for people with disabilities at a cost of 500 million shekels. But it’s deceptive to call this part of the coronavirus response: This money would have been distributed to the disabled in any case had Israel’s budget been passed as part of the agreement to increase disability stipends.

The second clause involves changing the infrastructure investment rules governing institutional investors. This has also been on the table for a long time and isn’t directly related to the pandemic response.

Another clause involves unemployment pay for self-employed people. Initially the plan stated that this clause would be approved by the Knesset the week it was published, but this, too, was a deception. The clause, which was approved by the Knesset Labor and Welfare Committee, would have enabled self-employed people to withdraw compensation from their pension funds, but at this stage no other plans are being drafted to enable unemployment pay for self-employed people along the lines of what salaried workers are entitled to from the National Insurance Institute.

Katz’s bureau did not respond to a request for comment.

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