The protests over the past week, both in Tel Aviv’s Rabin Square and outside the prime minister’s residence in Jerusalem, produced an unintended result: A pressured Prime Minister Benjamin Netanyahu decided, contrary to the positions of both the Finance Ministry and the Bank of Israel, to make payouts to every single Israeli that will cost six billion shekels ($1.7 billion) in total. The plan was unveiled Wednesday evening, following a steady rise in incidence of the coronavirus, as the government was already planning the next lockdown.
Under this plan, the state will pay single people 750 shekels, while a family with one child will get 2,000 shekels, a family with two children will get 2,500 and a family with three children will get 3,000 shekels. The grant makes no distinction between employees and the self-employed, or between people who have been hurt by the coronavirus crisis and people who haven’t.
Six billion shekels is an enormous amount of money that could be spent in many fairer and more effective ways, such as larger payments to the true victims of the crisis or professional training for people who have lost their jobs to prepare them for the moment when the economy starts recovering. But Netanyahu – in contrast to his policy as finance minister from 2003 to 2005, when he cut government allowances to push people into the job market – decided this time to adopt a populist, ineffective solution that was concocted by the chairman of his National Economic Council, Prof. Avi Simhon.
Netanyahu said he decided on a means-blind grant because it will get money into people’s pockets quickly. He argued that had criteria been set for the grant to make sure it went only to people who have truly been harmed, this would have complicated the process and delayed the payments. But this claim contradicts his praise of Israel’s digital capabilities. It indicates that he thinks the computerized systems used to date don’t enable victims of the crisis to be identified. Netanyahu even claimed that the grants will increase consumption and thereby help businesses. But that doesn’t jibe with the lockdown the government is planning, which will force many businesses to close.
Netanyahu’s goal boils down to bribing the public – throwing a few shekels at it to reduce its anger over his policies. The protests and his legal situation have led him to adopt a populist approach based on shooting from the hip. This sends a terrible message that will undermine the economy’s ability to recover from the crisis. Above all, it reflects a prime minister who has completely lost his cool.
The above article is Haaretz’s lead editorial, as published in the Hebrew and English newspapers in Israel.