Government reveals $320 million plan to stimulate investment, job retention in tech

The ministries of finance and economics published on Monday a NIS 1.1 billion ($320 million) plan to encourage investments and employment in the Israeli technology and industry sectors. The plan is based on the clauses of a previously announced NIS 8.5 billion ($2.5 billion) government aid package to accelerate the economy.

Although the budgetary framework for the overall assistance plan was approved in the Israeli parliament (the Knesset) more than a month ago, in order to approve the clauses intended to accelerate the economy, government authorization is required. The approval was supposed to go through at a meeting this week, which was canceled due to a political crisis. The members of Israel’s emergency national unity government that was sworn in following April’s elections are currently butting heads over the approval of the annual state budget.

The plan includes budgets to encourage investments, R&D, and innovation as well as opening markets with an emphasis on enterprises affected by the pandemic who retained a significant portion of their employees. It includes a budget for developing industrial zones and a budget to encourage employee recruitment and training by collaborating with employers, with an emphasis on placements in high-paying jobs.

Despite various statements, half a billion shekel of the employment encouragement grants that were earmarked for companies who retained their teams, have yet to be paid, despite Finance Minister Yisrael Katz’s commitment to do so two months ago.

“As part of the economic acceleration plan, we agreed on an industry assistance program that combines encouragement of investments and buttressing employment, which are essential to strengthening the economy during this period. The program also includes assistance to employers who have chosen to retain their employees despite a decline in their business turnover,” Katz said.

“In this plan, for the first time, the fair employers who chose to retain their employees despite a decrease in their business turnover will be compensated,” said Minister of Economy Amir Peretz. “I am glad that today every employer knows that employee retention is an act of solidarity that the state considers valuable and compensates.”

“The purpose of the joint plan is to leverage the crisis in order to strengthen the competitiveness of Israeli industry and high-tech and to secure and create new jobs,” said Ron Tomer, president of the Manufacturers Association of Israel, which is a co-signer of the plan.