The price of maintaining the territories – data from 2011-2012 budget

According to Peace Now’s calculations, the various state budget items includeat least 2 billion shekelsdedicated to the settlements and the maintenance of the occupied territories. However, the budget invested in the settlements is much larger but well hidden between the various budget items.

How much do the settlements cost us?

If you are looking for a bottom line with a number at the end, we are sorry to disappoint you, but it is very hard to estimate the price of the occupation and the settlements. The difficulty is not only because Israel pays very high prices for maintaining the settlements and the continued occupation in terms of its security, values, society and international standing but also because the items in the state budget simply do not specify allocations to the settlements explicitly. Most of the budget items are worded in a general way without a geographical breakdown and without listing the communities for which the money is designated. Nevertheless, past attempts to estimate the price of the settlements reached 2.5 billion shekels a year.

How, then, do the settlements receive the surplus allocations? It is done in the budget allocation stage apparently in the decisions of the various ministries to divide the budget pie between the different communities, and their choice to prefer investments and projects in settlements at the expense of other locations. In order to know about special benefits for the settlements, the decisions of the various government ministries must be followed on a daily basis, and complete transparency about the budget allocations is needed.

Retroactive information – Some of the figures can be found in the publications of the Finance Ministry and the Central Bureau of Statistics on state transfers to local councils. The information is published after the end of the budget year and collected retroactively based on the actual budget performance. The transfers to the local councils are just part of the overall investment in the settlements. According to Finance Ministry figures, in 2007 the state transfers to local councils in the territories amounted to NIS 1,127,455,469 (more than 1 billion and 100 million). That amounts to 8.9% of the total transfers from the state to councils that year. At that time the number of residents in the settlements was 3.8% of the residents of Israel. Therefore the budget for the settlements was more than double their relative size in the population.

According to CBS figures, gross investment in public construction in Judea and Samaria (not including East Jerusalem) in 2009 was NIS 431 million, which constituted 15.36% of total public investments in construction for housing that year. It should be noted that some of that amount is included in the amount transferred by the state to the local councils.

A. Amounts that appear explicitly in the budget proposal (NIS):

* Budgeting for disengagement is not a direct investment in the settlements but a continued investment in evacuating the settlements from the Gaza Strip

* Budgeting for disengagement is not a direct investment in the settlements but a continued investment in evacuating the settlements from the Gaza Strip

 B. Selected items where budgets for the settlements are hidden:


C. List of explicit budget items:

Housing Ministry:

• Security in East Jerusalem – NIS 76 million in 2011 and NIS 70 million in 2012 to guard settlers who live in the middle of the Palestinian neighborhoods in East Jerusalem – NIS 3,160 a month per settler. This is a 40% increase from the budget in 2010 which was NIS 54.5 million.
• Maale Adumim development – NIS 58 million in 2011 and NIS 31 million in 2012. In 2011, 200 housing units are scheduled to be sold in Maale Adumim.
• Har Homa development – NIS 114 million in 2011 and NIS 124 million in 2012. In 2011, 500 housing units are scheduled to be sold in Har Homa.
• Additional projects in the settlements – the budget specifies only particularly large projects but there are many other projects in the settlements that are not specified in the budget documents.
• Housing aid in priority areas – almost all of the settlements are considered national priority areas and home buyers are entitled to a NIS 97,200 in subsidized loans (the budget does not distinguish between development areas inside Israel and settlements. The total housing aid budget is NIS 87.368 million in 2011 and NIS 86.518 million in 2012. Some of it is dedicated to settlements).
• Discounts on land price – most of the settlements are defined as priority A areas where the Israel Land Administration subsidizes the price of land by 69%, or priority B areas, where the subsidy is 49% of the value of the land.

Ministry of Education:

• Participation in student busing at a rate of 90% for Judea and Samaria councils (that use bulletproof armored buses). For comparison: in other councils the ministry’s participation ranges between 40% and 85%.
• The Council for Higher Education in Judea and Samaria – responsible forpost-primaryinstitutions in the settlements (Ariel College, the Orot College in Elkana and the Herzog College in Alon Shvut). The Council’s funding comes from a budget of NIS 454,000 in2011 and NIS 450,000 in 2012.
• Allocation for Ariel College – the Ariel College receives the largest allocation of all colleges (in 2009 the sum was NIS 87.191 million).

Transportation Ministry:

• Subsidizing public transportation by bus – NIS 31 million a year (under the code name “subsidies for other populations” – for settlers and Haredim).
• Armoring buses – NIS 10 million a year.
• Highway #20 – NIS 180 million. The road is meant to connect Pisgat Ze’ev to Highway 45 towards Modi’in and Tel Aviv. This means paving an obstacle on the road to a final settlement, with infrastructure running through Palestinian neighborhoods which are supposed to be part of the Palestinian state in the final settlement.
• Upgrading Highway 1 between Mishor Adumim and the Good Samaritan junction, and between Pisgat Ze’ev and the Zeitim intersection – NIS 255 million.
• Additional roads and projects in the settlements – the budget specifies only especially large projects but there are many other projects in the settlements that are not specified in the budget documents.

Defense Ministry:

• The seam zone (continued construction and operation of separation fence) – NIS 790 million in 2011 and NIS 842 million in 2012.
• Coordination of government activities in the territories (administration apparatus for territories and settlements) – NIS 238.435 million in 2011 and NIS 233.499 million in 2012.
• Emergency security expenses – armoring and security components for the settlements and confrontation line communities – NIS 318.525 million in 2011 and NIS 316.506 in 2012.
• Every settler is entitled to armor their private vehicle against stones at the expense of the state.

Agriculture Ministry:

• Settlement department – the department gives support to settlements and communities in the Negev and Galilee. The department’s budget for 2011 is NIS 79.75 5 million and NIS 77.699 million for 2012.
Funding illegal outposts: There are 120 official settlements in the territories. According to the budget papers, the settlement department handles 134 settlements in the territories (and two outposts). Therefore at least 16 outposts are enjoying department support.

Various subsidies:

• Exporter compensation (item 320408) – NIS 11.165 million in 2011 and NIS 10.83 million in 2012 — compensation for settler exporters for loss of tax discounts in the EU, which does not recognize goods from the territories as goods from Israel under the free trade agreement.

The Prime Minister’s office

• Continued budget for disengagement – NIS 240.9 million in 2011 and NIS 241.1 million in 2012 (item 0406).
• Under the item “project administration”– NIS 73.572 million in 2011  and NIS 70.658 millionin  2012– most of the budget is for projects in Jerusalem:

a. Strengthening the Jewish hold on East Jerusalem – a multi-year project to strengthen Jewish presence in East Jerusalem through tourism development. The 2011 budget includes a NIS 25 million supplements.
b. Supporting the Western Wall Heritage Foundation – an organization that manages and develops the Western Wall area and is in charge of archaeological excavations and construction in the Muslem quarter and its surroundings.The 2011 budget includes a NIS 7.5 million supplement.

D. The hidden budgets in the budget proposal:

Most of the settlement budget is hidden in the various budget items without explicit specification. The state budget is written generally without regional specification, so that it is impossible to know how much of it is dedicated to the settlements and how much to other parts of the country. Only special items for the settlements, which cannot be written into other general items, appear explicitly in the budget, and they amount to about NIS 2 billion.

For example, the Housing Ministry’s budget is NIS 5.9 billion and it includes planning, development and construction, as well as grants and benefits to buy apartments. Part of that budget goes to settlements. The same is true for the budgets of the ministries of agriculture, industry and all the other ministries.

Priority areas – Another way to encourage the settlements is to define them as national priority areas. Besides the ordinary budget, the government ministries also provide various benefits to communities and residents according to each ministry’s map of priority areas. This budget, although it is detailed in the budget items, does not include a breakdown into areas and localities. In December 2009 the Netanyahu government decided on a map of priority areas that defined almost all of the settlements as national priority areas.

Continuing the settlements and the occupation of the territories is a controversial question in Israel. The financial price of at least NIS 2 billion a year is tremendous. But the budget remains vague and unspecific regarding the funding of the settlements. A comprehensive process is required to make the state budget transparent and clear regarding investment in the settlements. This means requiring the government ministries to report the geographic breakdown of their budget allotments and close monitoring of those figures.

Additional Reading Regarding the Cost of the Settlements:

The Burden of Occupation – A Thorough Research by Adva Center – click here.

Historical, Political and Economic Impact of the Settlements, Macro.org.il, July 2009 – click here.

Special Haaretz Study – the Cost of Settlements, Sep. 2003 – click here.

OECD study Geographic Coverage of Israeli Data, July 2011 – click here.

Settlements have cost Israel $17 Billion, Study Finds – Haaretz, March 2010 – click here.