What Israelis have to pay to make a Palestinian state impossible

July 31, 2012
Sarah Benton

Netanyahu Increases Settlement Spending by 38%, $10-Billion Spent Over Past 20 Years
By Richard Silverstein, Tikun Olam
July 30, 2012

The Israeli business publication Calcalist broke a major new story (Hebrew) about a government report which recounts Israeli spending over the Green Line. The document, prepared for the U.S. government (which deducts from foreign aid expenditures monies spent by Israel on settlements), has so far been kept a secret (though Haaretz has just published its own short summary in English). That’s because it’s highly damaging to the government’s contention that the settlements and Israeli investments in them are not the obstacle to peace that the Palestinians and peace activists say they are.

In 2010, the Netanyahu government increased settlement spending by 38% over the year before. The overall budget grew by only 2.5% during that year. Per capita spending there is higher than the relative number of residents in the Territories (compared to those living within the Green Line) by 80%. Netanyahu invested $250-million on Jewish settlement in that period and $2.5 billion overall from 2003 to 2011. From 1992 to 2001, the government spent a total of $7-billion on settlements. This sum does not include government spending on security for the settlements provided both by private firms and the IDF. If it did, the numbers would be many times higher.

When confronted with these numbers the settler leadership actually has the chutzpah to claim that these are not investments solely benefiting Jews, but rather spending that will improve the chances for co-existence. They actually have the temerity to claim that the spending, which benefits Jewish settlers exclusively, benefits the Palestinians as well, since it includes shared water and power lines, and roads (yes, you heard me, roads, that apartheid infrastructure that Palestinians may not step foot on).

The government’s response too was instructive. It said the claims in the Calcalist report were “entirely without foundation.” How do they manage such a statement? Are the numbers wrong? Are there other considerations the report doesn’t take into account? We’ll never find out since the spokesperson didn’t even bother to support the claim with facts or evidence.

This is all happening against a backdrop of Israeli budgetary retrenchment, which anticipates increased taxes to pay for higher military spending and a potential military confrontation with either Iran or Syria (or both). It’s embarrassing to realize that the government will be taking money from its citizens within the Green Line and transferring it to an exceedingly small number of citizens (around 10%) living over the Green Line.

Peace Now’s plan to save billions by reducing some benefits of settlements

Instead of tax hikes – stop indulging the settlements

Netanyahu’s new austerity plan aims to reduce the deficit through an across-the-board budget cut of NIS 800 million. All Israelis will feel the new VAT tax hikes, but one group remains insulated from the majority of the austerity measures: the settlers.

This proposal aims at reducing the settlers’ benefits to the same level of the average Israeli citizen in proportion to their numbers in society, not eliminating essential services in the settlements.

Peace Now has noted a few line items that would save the state at least NIS 1.6 billion if eliminated. Download the full plan

Contribution of various government ministries to local authority budgets: savings of NIS 310 million

Various government ministries contribute to the local authority budgets in order to provide education, welfare and other services. According to Central Bureau of Statistics (CBS) figures, the various ministries (Ministries of Education and Interior excluded) gave NIS 606,701,000 to settlements localities, out of NIS 7.4 billion granted to all localities (i.e. 8% of the budget). Had the settlements received funding in accordance to their proportion of the population (i.e. 4% of Israeli citizens), the Government would have saved NIS 310,658,440.

The contribution of all ministries to the settlements is NIS 4,862 per capita; in Israel it is NIS 2,312.

The Ministry of Education – Savings of NIS 298 million

The Ministry of Education grants more to settlements than to Israeli localities, both in the regular budget and in the development and construction budget. According to the CBS, in 2010, the settlements received from the MOEd NIS 401 million out of NIS 7.5 billion granted to all localities as regular budget (i.e. 5.4%). Had the settlements received the funding in accordance to their proportion (i.e. 4% of Israeli citizens), the Ministry would have saved NIS 102,923,880.

In addition, according to the data reported by the Ministry of Finance to the US Administration (see below), the construction and development budget of schools in settlements was NIS 145.2 million in 2011.

The Higher Education Council of the OccupiedTerritories, which is funded by the MOEd at NIS 115,668, recently approved the declaration of the college in Ariel as a university. The Minister of Finance promised to allocate NIS 50 million for that. College officials estimate that it will take another NIS 160 million to complete the process of establishing the university.

Per pupil, the funding of the MOEd to settlements (in regular budget) was NIS 8,034, whereas in Israel it was only NIS 4,915 (the ultra-orthodox settlements of Beitar Illit and Modi’in Illit excluded). It is worth mentioning that this is only the budget transferred through the localities. There are many other funds that go to the settlements, directly from the MOEd to the schools, especially to religious schools.

Ministries of Industry, Agriculture, Water and Settlement Division – Savings of NIS 109 million

In an agreement with the American administration of the early ’90s, the Israeli government promised to report the amount in the budget transmitted each year to the settlements, so the administration can offset this sum provided by the U.S. in loan guarantees to Israel. Following that stipulation, the Finance Ministry has provided the Americans with a calculation of unique government expenditures on the settlements every few months, and the administration deducts an amount from the guarantees granted to Israel based on assessments and amendments they make themselves.

Peace Now received those figures and found that the investment in settlements by the ministries of Trade and Industry, Agriculture, Water and the Settlements Division in 2011 was NIS 108,854,813.


Transportation Ministry and the National Roads Company: Savings of NIS 342 million

The figures transferred to the US Administration show that in 2011 the investment of the Ministry of Transportation in settlements was NIS 306.8 million. An additional NIS 35 million was allocated for bus discounts for “special population” (i.e. settlers and ultra-orthodox). The figures reported to the US Administration do not include construction of intercity roads to the settlements because it is considered an investment for the Palestinians too, not just for Israeli settlers.

Housing Ministry: Savings of NIS 175 million

The figures reported to the US Administration show that in 2011 the investment of the Ministry of Housing in development and construction in settlements was NIS 87.8 million.

In addition, the Israeli Government decided to invest over NIS 65 million in building two alternative settlements for the relocation of the Migron outpost (in Adam and in Winery Hill). The cost of caravillas for the Ulpana settlers was estimated to be at least NIS 7.8 million. The proposal to saw the buildings into 108 pieces and rebuild them someplace else was estimated by the Prime Minister would cost NIS 14 million.

Tourism Ministry: Savings of NIS 18 million

The Tourism Ministry contributes at least NIS 785,000 to publicity campaigns to encourage tourism in the OccupiedTerritories.

In addition, as part of the Heritage Plan, the government decided to allocate NIS 17 million to the development of sites in the Occupied Territories.

Finance Ministry: Savings of NIS 10.8 million

Following the decision by the EU to implement the free trade agreement with Israel only for goods produced in Israel and not in the settlements, the Finance Ministry compensates exporters who manufacture in the settlements for the loss of tax benefits in the EU in the amount of NIS 10.8 million every year.


The Ministry of Energy: Savings of NIS 6.45 million

The Israel Electric Corporation allows private parties to generate solar electricity and buys the electricity from them at a rate set by the Ministry of Energy. While the price the IEC pays for a single kWh manufactured in Israel is NIS 1.61, the price in the settlements is NIS 2.04. At a minimum estimate of of 15 million kWh a year generated in the settlements, the Israeli government is paying an additional NIS 6,450,000 for the special rate.


The Interior Ministry: Savings of NIS 371 million

In addition to the funds that are transferred to the settlements localities by the different ministries, the Ministry of Interior grants the localities an additional NIS 3.5 billion for balancing their budgets and for development.

In 2011, the MOIN gave NIS 369 million out of the NIS 3.5 billion to the settlements (i.e. 10%) which is 2.5 times their proportion in society. Had the settlements received the funding in accordance to their proportion, (4% of Israeli citizens), the Government would have saved NIS 224,296,088.

In addition the MOIN gave another NIS 12,470,000 as part of “Minister Grants” which allows the Minister discretion to increase funding to localities without specific criteria.

Through the years the MOIN has amassed a list of unique grants that are given only to settlements:

Reduction of public money devoted to political campaigning – Savings of at least NIS 10 million

The settlement local authorities transfer millions of taxpayers’ Shekels every year to controversial political activity.

Some of the organizations funded by the settlements’ localities:

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