Ivane Machavariani, Minister of Finance: “GEL 1,200 in assistance for six months is little but the US is giving USD 1,200 to the part of the population which meets the income criteria. Taking into account the purchasing power, we are giving almost as much as the US.” Verdict: FactCheck concludes that Ivane Machavariani’s statement is a LIE.
In accordance with the decision of the Government of Georgia, hired workers who lost their jobs as a result of the coronavirus-induced pandemic will receive GEL 200 monthly assistance payments for six months (in total GEL 1,200). Self-employed individuals will be eligible to collect one-off GEL 300 assistance payments if they produce proof of having lost their income.
The idea of the assistance as referred to by the Minister of Finance is as follows: People whose annual earnings are under USD 75,000 will receive USD 1,200 as a one-off assistance payment (and an additional USD 500 for one child) even if they manage to keep their jobs. Another package was approved for furloughed workers which is similar to the Georgian assistance programme for those who lost their jobs. In particular, furloughed people in the US will also receive a weekly USD 600 assistance payment for four months in addition to their unemployment insurance payments which amounts to USD 9,600 in total. The programme also envisions extending the 13-week unemployment insurance as a bonus.
Therefore, the Minister of Finance selected the wrong package from the American model and, thereby, is misleading the public. Some people who were furloughed in Georgia will receive GEL 1,200 in assistance and the others will receive GEL 300 whilst compensation for their counterparts in the US is USD 9,600 instead of USD 1,200. Every American taxpayer whose annual income is under USD 75,000 will receive USD 1,200 in assistance whether or not they keep their jobs. The Georgian assistance package does not include such a component at all and employed people are not eligible for the budget assistance. Therefore, the statement of the Minister of Finance that the amount of assistance in Georgia and the US is “practically the same” does not correspond to the truth.
The Minister of Finance of Georgia, Ivane Machavariani, during the presentation of the anti-crisis plan, stated (from 1:33:00): “GEL 1,200 in assistance for six months is little but the US is giving USD 1,200 to the part of the population which meets the income criteria. Taking into account the purchasing power, we are giving almost as much as the US.”
In accordance with the decision of the Government of Georgia, hired workers who lost their jobs as a result of the coronavirus-induced pandemic will receive GEL 200 monthly assistance payments for six months (in total GEL 1,200). Almost 350,000 Georgian citizens will be eligible to receive the assistance payments with total assistance allocations equalling GEL 460 million. If self-employed individuals produce evidence that they have lost their income they will be eligible to collect GEL 300 one-off assistance payments.
The idea of the assistance as referred to by the Minister of Finance (there are exceptions for different income statuses) is as follows: People whose annual earnings are under USD 75,000 will receive USD 1,200 as a one-off assistance payment whether or not they keep their jobs. Assistance for people in a USD 75,000-99,000 annual income category will gradually diminish whilst people whose income is over USD 99,000 are not eligible for the assistance.
The Minister of Finance’s comparison of the American package to the Georgian assistance package for furloughed people is irrelevant since they envision essentially different forms of assistance. American furloughed taxpayers will receive USD 600 in weekly assistance for four months in addition to their unemployment insurance premiums which is USD 9,600 in total. In addition, the package envisions extending the 13 weeks of unemployment insurance. In the end, a furloughed person will receive USD 985 per week including assistance and insurance. Of the USD 2.2 trillion bailout bill, USD 260 billion is allocated to help Americans who were furloughed and USD 290 billion is allocated for the package to which Mr Machavariani was referring. Of note is that critics in America believe that such a type of assistance will create a harmful incentive to remain unemployed.
Of separate mention is that the Minister of Finance employs the right approach in order to measure the allocated assistance in international dollars in terms of purchasing power parity (PPP). The PPP approach envisions that different currencies of the world have different purchasing power. One USD buys roughly 3 times more goods and services in Georgia than in the USA.
Author – Vakhtang Demuria
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