Israel Must Help Businesses Survive COVID Again

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A line for COVID testing in Tel Aviv last week.
A line for COVID testing in Tel Aviv last week.Credit: Hadas Parush

The government’s main failure in managing the coronavirus crisis has been its failure to tell the truth – it has no ability to control the pandemic, and the only thing it is trying to control is the economic situation. That’s why it stopped funding PCR tests for anyone who wants one and is instead permitting them only for people over 60 or in high-risk groups. That’s also why it hasn’t announced any plan to help businesses that are suffering and have experienced a significant decline in economic activity in recent days.

This refusal to explain the rationale for its economic handling of the pandemic is perceived, rightly, as an evasion of the government’s responsibility to address the damage and distress caused by the current wave of the virus.

Admittedly, the economic situation is complex. In the initial stages of the crisis, before there were any vaccines, the Netanyahu government tried to control incidence of the virus through lockdowns. The necessary corollary to these lockdowns was a governmental commitment to compensate businesses and employers whose income was reduced.

Today, the situation is different. We do have vaccines, which are admittedly less effective against the omicron variant, but nevertheless allow us to refrain from lockdowns. Yet at the same time, even though the number of seriously ill patients remains relatively low, incidence of the virus is high and the number of people in quarantine is even higher. The high number of patients and the expectation that it will only increase in the coming weeks have resulted in many absences from work and undermined economic activity at restaurants, hotels, shows, event halls and such.

An exceptional situation has thereby been created. Most businesses are open and functioning, but many owners report a steep decline in revenue. The government thus faces a dilemma: Should it make a sweeping promise to compensate those who are hurting, or force businesses to get used to living with the coronavirus, make the necessary adjustments and wean themselves off government aid?

A government announcement of sweeping compensation to businesses could create an incentive for them to reduce their operations or even shut down entirely until the current wave of the virus passes. That would have serious economic ramifications, and there’s no need for it. Moreover, the aid would likely go even to businesses that don’t really need it. Yet on the other hand, completely ignoring this distress may well lead to businesses collapsing.

Despite this dilemma, the state has a supreme responsibility to provide solutions for businesses that have been severely hurt, just as it already did for the aviation and tourism industries, which haven’t been able to recover from the crisis.

Even Finance Minister Avigdor Lieberman, who initially opposed compensating tour guides and told them to switch professions, eventually understood the magnitude of the moment and presented a plan to help them. The solution therefore lies in being able to determine who has truly been harmed by omicron’s spread and then help them survive this difficult period.

The above article is Haaretz's lead editorial, as published in the Hebrew and English newspapers in Israel.

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