Against the backdrop of the high and rapid appreciation of the shekel in recent months, Finance Minister Bezalel Smotrich and senior officials in his ministry presented today (Tuesday) an immediate outline to strengthen the export and high-tech sectors in a total volume of approximately NIS 1.6 billion. The outline was formulated by a special task force in the Ministry of Finance together with the Innovation Authority, and after weeks of holding roundtables and dialogue with the Manufacturers Association and market representatives – including startup companies, growth companies, multinational companies, and investment funds. The purpose of the outline is to assist these sectors in coping with the effects of the strengthening of the shekel, to preserve the competitiveness of the Israeli economy, and to ensure the continued activity of the main growth engines.
As part of the immediate steps to strengthen the high-tech sector, approximately NIS 1 billion will be allocated to a fast-track assistance channel for companies in the startup and growth stages. The assistance will be provided through grants against matching funds with the aim of enabling the extension of the operating period (Runway), continued growth, and preservation of activity in Israel. In addition, an inter-ministerial committee will be established to conduct an in-depth review of preserving the global competitiveness of the Israeli high-tech sector, and will examine structural changes ahead of the formulation of the state budget for 2027. These steps join previous moves such as the legislation of Pillar 2, the expansion of tax credits for research and development, the establishment of the “Yozma” fund totaling NIS 580 million, and a national program for artificial intelligence amounting to approximately NIS 3 billion.
Concurrently, the outline presents a series of immediate steps to strengthen the industrial sector. Within this framework, NIS 175 million will be invested in mechanization and advanced equipment for industry through grants within the framework of the Encouragement of Capital Investments Law and the productivity and advanced manufacturing track. In addition, an amount of NIS 25 million will be allocated to support exporters through the expansion of the Export Institute’s activities and grants within the framework of the “Market Penetration Pilots” track. The program also includes an allocation of NIS 10 million for professional training in cooperation with employers with placement for workers in high-productivity jobs, alongside the expansion of the ‘accelerated depreciation’ benefit for exporting industrial companies at an estimated cost of approximately NIS 360 million.
The Minister of Finance, Bezalel Smotrich: “We reacted quickly to developments and we are coming out with an immediate outline for important assistance to the export sectors totaling NIS 1.6 billion. I expect that the Bank of Israel will also enlist in the challenge and respond to what is happening. For a long time now, I have been of the opinion that a sharp interest rate cut is the answer that will assist and jumpstart the economy. The State of Israel is in an economic boom and those who invest here will make a lot of money.”
The Director of the Budget Department, Mehran Frozenfar: “The appreciation of the shekel and the changes in currency rates pose significant challenges to the export and high-tech sectors. The plan is designed to provide an immediate response to current challenges, and at the same time to continue investing in structural steps that will strengthen the competitiveness of the economy over time.”
The Chief Economist, Dr. Shmuel Abramzon: “The sharp and rapid appreciation in the exchange rate creates a significant challenge and makes it difficult for startups that have raised foreign capital to meet the milestones for their continued activity here. The strengthening outline is intended to give companies breathing room during this challenging period, but it is not intended to replace efficiency and innovation.”
CEO of the Innovation Authority, Dror Bin: “We are injecting one billion shekels today to strengthen the competitiveness of Israeli high-tech, which accounts for 18.3 percent of the GDP and 58 percent of exports. The funding will provide startups and medium-sized growth companies with the ability to deal with these changes, and in the coming weeks we will make fast tracks available to them.”
President of the Manufacturers Association, Avraham Novogrocki (Novo): “I want to thank the Ministry of Finance for enlisting and holding feverish discussions with us in order to formulate an immediate response to the distress of the export industries. The plan presented today is an important cornerstone within a multi-year planning framework to ensure the competitiveness of the economy.”
Source:
www.jpost.com
