Israeli Finance Minister Pushes Hard-Right Agenda Despite Backlash

Finance Minister Bezalel Smotrich has frozen funds allocated to struggling Arab Israeli municipalities, halted access to university programs for East Jerusalem residents, and aggressively pursued West Bank settlement

Fida Shehada has been sitting in a protest tent in front of the Israeli prime minister’s residence in Jerusalem for several days now. In her role as coordinator of the Women Against Weapons Coalition, she has been issuing warnings for years about the rising crime rates among Israel’s Arab population. By sitting in her tent, she hopes to raise awareness of the issue.

“All I want is for us to stay alive,” she said. “But also, I want equality and respect. All this is only getting further away.”

This year is expected to break the record for the number of Arab Israelis killed, mostly in non-terrorist, intra-Arab violence, most commonly by guns. More than 140 Arab Israelis have been killed since the beginning of 2023, and the number is expected to reach 222 by the end of the year, according to the Abraham Initiatives, an Israeli nongovernmental organization that promotes Jewish-Arab coexistence. Other crimes of violence are also rampant in Arab towns.

Israel is now under the leadership of the most right-wing government in its history. Led by Prime Minister Benjamin Netanyahu and his Likud party in a coalition with far-right and ultra-Orthodox parties, the government has begun to implement policies that have shunned Arab Israelis, increased the wedge between Palestinian and Israeli residents of Jerusalem, and strengthened Israeli settlements in the West Bank.

Last week, far-right Finance Minister Bezalel Smotrich announced several moves that attracted widespread criticism, even from within the government, including the freezing of hundreds of millions of Israeli shekels designated for Arab municipalities and the extension of a freeze on higher education programs for East Jerusalem Arabs, many of whom have residency permits but not Israeli citizenship. In addition, using the added authorities granted to him in the coalition agreements, Smotrich has intensified Israel’s settlement building in the West Bank.

“Smotrich is a man with a plan,” Shehada said. “He came to get things done, and if we will not put up a fight, it will not end with just the judicial reform.”

Shehada was referring to the coalition’s contentious program to overhaul the judicial system, which for months has sparked massive protests and heated debates. However, the government has also embarked on a legislative blitz in other areas that touch civilian life and has begun making other changes, some of which require no legislation.

Smotrich, head of the far-right Religious Zionism party, is a staunch opponent of a Palestinian state and has vowed to increase the Israeli presence in the West Bank, with the ultimate aim of annexation. The territories were captured by Israel in the 1967 Six-Day War, and since then, more than 700,000 Jews have settled in the West Bank and East Jerusalem. The international community considers the settlements illegal and the Palestinians see the territories as an integral part of their future state.

According to Peace Now, a left-wing Israeli organization that monitors settlement construction in the West Bank, the government has approved over 13,000 new units in the territories since the beginning of the year.

“Israel’s government continues to promote construction in the settlements deep in the West Bank, just as Minister Smotrich promised to his voters,” Peace Now said in a statement. “This is another example of the government’s policy, effectively transferring the authority over the West Bank to Smotrich. Israel’s government is openly and knowingly working to undermine the chances of a two-state solution. 2023 has emerged as the highest year on record in terms of units approved.”

Smotrich makes no distinction between Israeli Arabs, who live in Israel and are Israeli citizens, and Palestinian Arabs, who live in the West Bank and are not Israeli citizens, said Prof. Benjamin Bental, chairman of economics at the Taub Center for Social Policy Studies.

“For Smotrich, Arab Israelis and Palestinians are the same and they need to be driven away from Israel. The government is taking such steps with no consideration of their far-reaching consequences,” Bental said.

He said Smotrich’s decisions contravene Israeli law. The budget passed by the Knesset several months ago, which has status as law, allocated funds both for Arab Israeli municipalities and for academic programs for East Jerusalem Arabs. In addition to the budget’s legal status, previous government decisions are legally binding unless canceled by the sitting government. Bental said that for the government do that, the allocations should have been left out of the current budget.

“This means Smotrich or anyone else can just change plans on a whim, without any reasoning,” he said.

It is likely that Smotrich’s latest decisions will be challenged by different organizations, putting the government even more at odds with the judiciary it is trying to reform.

The far right, Bental explained, is continuously provoking such confrontations “in order to strengthen their argument in favor of the overhaul.”

The government hopes to reform the judiciary in order to rein in the courts, which critics claim have accumulated too much power in recent decades, thus hampering the ability of the executive branch to implement policy.

The coalition passed the first part of the overhaul in the Knesset last month, ending the Supreme Court’s ability to review and strike down laws and decisions according to the “reasonableness standard.” However, it could use other legal standards, putting it at loggerheads with the government.

“It is clear these decisions [by Smotrich] are unreasonable, but the court will not be able to use this standard against them,” Bental said.

In Jerusalem, the higher education institutions that will suffer from the funding freeze wrote a letter to Netanyahu, Smotrich, and other ministers.

“The … puzzling decision would doom the young people of East Jerusalem to a fate of indolence, without a promise of employment, and without the ability to live in a shared society. The meaning of this decision is no less than damage to Israeli society and its economy, and we will all pay for this damage for decades to come,” the letter read.

Smotrich was not dissuaded by calls from security officials, who argued that increased education of the Arab population in East Jerusalem would lead to a reduction in participation in terrorist activity.

While Israel controls the largely Arab-populated sectors of East Jerusalem, access to education and employment is very limited without knowing Hebrew, a challenge the university programs are trying to address. In interviews given to the Israeli media, Smotrich said he was freezing the funds due to a rise in Islamist extremism in the universities offering the program.

Meanwhile, back in Jerusalem, Fida Shehada continued to welcome supporters arriving at her protest tent and said she was anxious about the future of already struggling local councils.

The funds for the municipalities are meant to boost their economy, upgrade weak infrastructure, and fight crime in Arab communities. These were approved by the previous government, which included the Arab Ra’am party in its coalition, and were part of the most current budget passed by the Netanyahu government.

According to Smotrich, these added funds are discriminatory in favor of the Arab municipalities.

“There is no justification in the world to give the Arab municipalities preference over weak Jewish municipalities,” he explained in a Facebook post. “We need to find funding for other needs such as security, incentivizing the economy, and more. … In my list of priorities, all of these are more important than continuing this political funding given to Ra’am.”

Arab Israeli citizens make up about 20% of Israel’s population. While they have the same rights to vote as Jewish citizens, their daily lives are considerably different than those of the Jewish majority. They face widespread, often institutionalized discrimination, higher unemployment rates, and significantly higher crime rates. The previous government tried to begin to rectify the situation by approving massive funding to meet a variety of needs.

“If Smotrich implements the plan, this will be the death of the Arab municipalities,” Shehada said. “This is no surprise—this is a government that speaks about us Arabs, but not with us.”

Many Arab local councils are already in debt. With a significantly lower tax collection rate than in Jewish towns, the Central Bureau of Statistics places the majority of the Arab municipalities in the lowest socio-economic bracket and as highly unstable.

Earlier this year, Netanyahu announced the establishment of the Ministerial Committee on Arab Sector Affairs. Aside from one Arab representative, all members of the committee are Jewish.

Smotrich claims the additional funds will find a way to organized crime, which already has a foothold in the daily lives of Arabs in Israel.

“Crime is a symptom of things that are lacking, such as education and social services,” Shehada said. “Taking away funds will not lead us to a better result. On the contrary, crime will seep further into daily life and people will be forced to seek solutions piratically.”

No government official visited Shehada or the other activists at the protest tent. Arab Israeli activists are planning further measures, including a general strike in Arab towns.