Who Benefits Most From Bibi’s Universal Aid Plan? Bibi

No doubt there are needy Israelis who will welcome a check, but it’s mostly a waste of taxpayer money aimed at buying a little political peace for the PM

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Netanyahu, right, unveils his universal grants plan; on the left is Tax Commissioner Eran Yaakov
Netanyahu, right, unveils his universal grants plan; on the left is Tax Commissioner Eran YaakovCredit: Amos Ben Gershom, GPO

Aside from fever, dry cough and fatigue, one of the most common symptoms of COVID-19 is Monday morning quarterbacking. Months after it was first detected, we know surprisingly little about the virus, how it spreads and how best to contain it. But that hasn’t stopped experts, the media and social media loudmouths from calling out officials after the fact for policy missteps.

In Israel, the number of new cases per day exhibiting this “I told you so” symptom has inevitably soared with the second coronavirus wave. Netanyahu, the Health Ministry and the treasury have been the favored targets, but among all of them, it’s the treasury that least deserves it.

The Finance Ministry is accused of playing Scrooge as the pandemic was spreading and the economy was in freefall. As of the end of June, it had spent less than half the money allocated for addressing the impact of the coronavirus. Recipients say the process for getting the aid was bureaucratic and illogical, as if it were designed to deny help rather than extend it.

But in all fairness to the treasury, officials were hoping that the first coronavirus wave would come and go and that if there was a second wave it would come months, not weeks, later. If all the tens of billions that had been promised had been allocated quickly, much of it would have gone down the drain on recipients who didn’t need it and Israel would be facing huge budget deficits that would have to be paid back later in higher taxes or government cutbacks. A second wave was not inevitable, as China has shown (so far).

The treasury was wrong, but we know that only in retrospect. Presumably humbled officials will do better with this week’s second-wave aid program. The government now assumes that first wave, second wave or whatever, the pandemic is going to be with us for months to come – although, caveat emptor, officials may now have turned over-pessimistic. We don’t yet know.

Another coronavirus symptom that is less common – so far Netanyahu is the only one in Israel to show it – is hubris that evolves into panic. The hubris was in evidence when Bibi proclaimed victory over the pandemic and called a premature easing of the lockdown in the middle of May, telling Israelis, “enjoy yourselves.”

They did, and within two weeks Netanyahu was backtracking and the public was blaming him for the miscall. But it wasn’t as if the public knew better than the prime minister. After Bibi’s retrospectively disastrous announcement, public confidence in policymakers, the economic outlook and Netanyahu all rose. Only in the last month has trust in Netanyahu’s ability to lead Israel through the coronavirus crisis sunk from 47% to 29.5%, according to the Israel Democracy Institute.

Now Bibi is exhibiting symptoms of panic, and you don’t need an advanced medical degree to observe it, nor even an advanced economics degree.

The universal grant plan he unveiled on Wednesday isn’t going to do much to address the economic distress caused by the coronavirus. It amounts to little more than a bribe to keep people from joining increasingly vociferous protests.

Not much help, after all

Netanyahu’s proposal will give up to 3,000 shekels ($875) to families with children and 750 shekels to singles, regardless of income or economic status. At an estimated total cost of 6 billion shekels, the grants won’t exactly break the bank, but at a time when the government is strained financially, it’s about the worst way it could be allocating resources.

Its sole virtue is that it would deliver money to people quickly. But what’s the rush? Unemployment is over 21% (or 12%, if you use the definition of the Central Bureau of Statistics), but the rest of Israel is working. The jobless are entitled to unemployment benefits for another year under the second wave coronavirus aid package. The government is offering relief from mortgage payments and some taxes. The self-employed are due to get grants.

There are people who are desperate because for one reason or another they fall between the cracks of the other aid programs, but for every one of them there are probably eight or 10 who don’t. In any case, a one-time grant isn’t going to get the truly needy very far if the coronavirus weighs on the economy for another year.

That is why no major Western government has decided to simply hand out money without any criteria. Even the Trump capped the full payout for his giveaway at $75,000 annual income. Interior Minister Arye Dery’s plan to hand out 700 million shekels in food coupons at least requires beneficiaries have to be poor enough to qualify for discounts on municipal taxes, even if it has been carefully designed to mostly help his ultra-Orthodox constituency.

Netanyahu exhibited the panic symptom long before the coronavirus. But it tended to erupt only during election time and then only with inflammatory declarations about Arabs, not in actual policy. But in the last year or so, Bibi seems to have lost his grip. The annexation issue and the self-serving tax break he arranged for himself are two examples. The universal grant is another.

So, it’s not just about 6 billion shekels of wasted taxpayer money but about a man who is no longer up to leading the country. He is acting less like his idol Churchill than like Trump. There’s no question which kind of leader we need to get us through the crisis.

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