Sharp Tension Between the Israeli Ministry of Finance and Business Owners Over War Compensation Package

SadaNews Economy Translation - Recent hours have seen intense tension between the Israeli Ministry of Finance and business owners regarding the details of the initial compensation package related to losses incurred from the war on Iran and Lebanon.

The Israeli Ministry of Finance has warned against dual compensation, expressing its opposition to business owners' demands that workers forced into unpaid leave during the first week of the war receive about 70% of their salaries through "national insurance," and that the "state" contribute approximately 75% of their wages upon their return to work, depending on the decrease in company income. This was also translated by the SadaNews Economy Department, quoting from the Hebrew newspaper Calcalist.

In contrast, business owners claim that the plan does not cover income losses and consider it the worst since the Corona pandemic.

The Israeli Ministry of Finance initially proposed two pathways for paying salaries to employees in affected companies. The first involved granting employees unpaid leave for at least 14 days, during which 70% of the employee's salary would be paid by "national insurance." The second pathway involved the "state" sharing the costs of employees' salaries, with the extent of participation determined based on the percentage decrease in revenues.

In recent weeks, business owners have continually complained about the impossibility of granting employees unpaid leave for only 5 days. This complaint was particularly significant for large companies whose annual sales exceed 400 million shekels, which began their operations in the second week of the war, as these companies were ineligible for wage participation grants.

According to the website, under pressure from employers and members of the finance committee, the Israeli Ministry of Finance yielded to this matter, deciding to allow employees to take unpaid leave for only five days. This helped these large companies avoid having to pay their employees' wages for the first week of the war from their own resources.

The Hebrew newspaper's site indicates that although both sides exchange attacks and each seeks to portray the other as unreasonable and stubborn, their disagreement is logical and reflects two different worldviews. It points out that the Ministry of Finance should not compensate any company for indirect damages incurred and is only concerned with preventing corporate collapse and worsening poverty and economic entanglement.

On the other hand, companies disagree with this view, fundamentally believing that the Ministry of Finance is obligated to fully compensate for war-related losses.

Meanwhile, the Hebrew economic newspaper Globes reported that the total cost of the compensation plan, approximately 7 billion shekels, has reached its final stages in the Knesset, noting that it involves substantive disputes and significant conflicts between the Ministry of Finance and business owners.

According to the site, as translated by the SadaNews Economy Department, the minimum sick leave period has been reduced from 10 to 5 days, a broad expansion that has major budget implications, contradicting the Ministry of Finance's position regarding a request from the finance committee, which estimates the cost of this move at around half a billion shekels.

This measure aims to provide a solution for workers who did not attend work during the first week of fighting, when the economy was shut down except for essential workplaces, according to instructions from the Israeli home front.

The second expansion of the original plan includes providing full 100% compensation to companies in northern communities. The Ministry of Finance estimates this expansion will require an additional 150 million shekels, thus increasing the plan's cost in the finance committee by nearly 10%, rising to about 650 million shekels.

The Israeli Tax Authority is preparing to issue advance payments to companies starting next week.

Sources in the authority stated that with the final approval of the bill in the Knesset's general session, companies and self-employed workers will have the ability to submit requests for advance payments starting next Sunday.

The advance payment will be about 80% of the compensation amount received by the company under the Gaza battle schemes, and it will be disbursed within a few days, according to the site, as translated by the SadaNews Economy Department.