Netanyahu's Call for Coronavirus Aid for Businesses Faces Legal Hurdle

Law for compensating business covers war damage, not disease

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Benjamin Netanyahu visits Sheba Medical Center, Tel Hashomer, February 19, 2020.
Benjamin Netanyahu visits Sheba Medical Center, Tel Hashomer, February 19, 2020.Credit: Haim Zach/GPO

Prime Minister Benjamin Netanyahu and Transportation Minister Bezalel Smotrich said this week they would be looking for ways to compensate airlines and other Israeli business hurt by the new coronavirus outbreak.

Haaretz Weekly Ep. 63

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The government does have billions of shekels in a special compensation fund, but the law doesn’t allow its use to compensate airlines or other business for damage caused by an epidemic in a foreign country.

Netanyahu said on a tour of Sheba Medical Center, Tel Hashomer Wednesday that he had asked Finance Minister Moshe Kahlon to find ways to compensate businesses, in particular airlines.

“We are here in an event due to an outside force and we, as a nation, must deal with those who have been hurt in this matter, including citizens who have been infected and require special treatment, and, of course, businesses as well,” he said.

Smotrich meanwhile told Israel Radio that “the government will need to puts its hand in its pocket and compensate the airlines. ... The government wants to ensure aviation, it needs to help.”

He put the losses at El Al Airlines, Israel’s flag carrier, at $50 million, more than the airline itself has so far estimated. In any case, it is the biggest loser of Israel’s three carriers, which also include Israir and Arkia.

El Al is the only one that flies to the Far East. It has suspended flights to Beijing and Hong Kong due to the coronavirus. It is still flying to Bangkok, but after the Health Ministry ordered people returning from Thailand to self-quarantine for 14 days, traffic has dried up.

The compensation fund, whose funds come from the purchase tax, is designated to make payments in the event of “damage.”

The Purchase Tax Law doesn’t define damage but over the years it has come to be understood and employed to compensate people and businesses from war and other hostilities. Under certain conditions, it can also pay compensation for losses due to drought.

However, it may be able to pay compensation for lost work days to Israelis who have returned from areas designated by the Health Ministry as high risk and must undergo quarantine. In such, a case, they may be able to get paid by the National Insurance Institute.

A big question remains about employers’ obligations to employees who have to be quarantined. This week, Dubi Amitai, president of the Business Sector Presidency trade association, agreed with Labor Minister Ofir Akunis to clarify the issue.

More broadly, an array of ministries is examining what the implications of the coronavirus may be for Israel and how they can respond inside the framework of existing legislation. Sources said that amending laws, such as the Purchase Tax Law, would be difficult enough in normal times and more so while a caretaker government is in power.

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