Surplus Spending on Settlements Tops NIS 1 Billion

Data collected by the Ministry of Finance, processed by the Israeli Central Bureau of Statistics, and obtained by Peace Now reveals the following:

  • The Israeli government invests over NIS 1 billion a year in surplus funds for the settlement development (not including security expenditures and expenses for the ongoing maintenance of the settlements).
  • In recent years, there has been a 50% increase in investment in settlements – in 2017 expenditure was 1.650 billion and in 2018 1.4 billion. The first quarter of 2019 data indicate another increase.
  • The settlements receive about 12% of the Interior Ministry’s grants to local authorities, while their share of the population is less than 5%. In 2018, the authorities in the settlements received NIS 648 million out of NIS 5.5 billion granted by the Interior Ministry to local authorities.
  • As of September 2018, following the recognition of the Trump administration in annexing the Golan Heights, the Finance Ministry stopped reporting to Americans on investment in Israeli communities in the Golan Heights. At the same time, the first quarter figures for 2019 indicate record expenditures in the settlements, with NIS 390 million (between January – March 2019), compared with an average of NIS 354 million in each quarter in 2018 (including the Golan).

Peace Now: State figures themselves show that Israel continues to invest huge capital in developing settlements at the expense of development within Israel. The government’s decision this week to add another NIS 34.5 million in grants unique to the local authorities in the settlements indicates that the government has lost all self-regard for serving the Israeli public at large. With a transitional government on the verge of new elections and close to the end of the fiscal year, the government finds it appropriate to add millions of shekels to the indulgence that is already being given to settlement authorities that receive, according to Treasury figures, close to three times the proportion of their population.

Unique Settlement Expenses, according to the Ministry of Finance’s calculation:

Details of expenditures by government ministry (NIS millions):

To download the complete data table – click here

Calculation of Finance Ministry – Condition of the Americans:

The U.S. government has been giving the State of Israel loan guaranties for many years. In the early 1990s, the H.W. Bush administration decided to deduct from those guaranties the sums that Israel invests in the settlements. Following this condition, the Finance Ministry, through the Central Bureau of Statistics, passes every few months the calculation of the unique government spending on settlements, and the Americans offset the guarantees given to Israel by the estimates and corrections made by the U.S. government itself.

How the Ministry of Finance calculates the data:
The Ministry of Finance’s data is accompanied by a document explaining how the data is calculated. The document states that the government’s financial statements do not directly specify settlement expenses. Therefore, in every governmental expense, a calculation is made by the ministry, in which it separated from the budget clauses the expenses that were spent on the settlements. The expenses included in the calculation are the those of all government bodies and offices in the settlements in West Bank and the Golan Heights (not including East Jerusalem).

These expenses consist of the following:

  • The construction of the settlements as such, including public investment in dwellings; internal roads; buildings for educational, social and religious purposes; commercial centers, industrial parks and other facilities created for the establishment of producing units and/or to serve the residents of the Israeli settlements.
  • Subsidies and capital grants to local authorities and enterprises located in the settlements.
  • Benefits through tax rebates given to producers and residents in settlements.
  • The subsidy element contained in mortgages given on special conditions to the settlers.
  • Grants to residents for housing, transportation and other consumption items.
  • Government transfers to the Settlement Division of the World Zionist Organization intended to be spent in the settlements.

Other expenses not included in the Ministry of Finance calculation:

The expenses do not include services or government transfers provided to the entire population of Israel, nor services provided to any citizen regardless of place of residence. Thus, government expenditures on services that could be provided to settlers even if they resided in Israel were not included in the calculation.

The Ministry of Finance does not include in calculating the many security expenditures connected with the settlements, nor the expenses of the various security measures established in the settlements in the investment of many millions.

Apart from defense spending, the Ministry of Finance’s calculation does not include hundreds of millions of shekels invested in paving most of the bypassing and inter-urban roads for settlements, but only the internal roads within the settlements (the inter-urban roads were not included in the excuse that the Palestinian population may also use them).