Smotrich vows to divert some coalition money, as funds for war evacuees held up

Government agency for rehabilitation of southern communities gets only about a tenth of its NIS 1b funding; allocation of NIS 1.35b to civilian war needs still awaits approval

Sharon Wrobel is a tech reporter for The Times of Israel.

Evacuated Kibbutz Be'eri residents at a Dead Sea hotel, October 20, 2023 (Arik Zamir / Flash90)
Evacuated Kibbutz Be'eri residents at a Dead Sea hotel, October 20, 2023 (Arik Zamir / Flash90)

As Finance Minister Bezalel Smotrich’s decision to divert only part of the contentious discretionary coalition money to the war effort comes under fierce scrutiny, funds needed to support evacuated families and rehabilitate shattered communities along the Gaza border are being held up.

Opposition lawmaker Orit Farkash-Hacohen on Sunday urged Smotrich to stop delaying the transfer of government money to evacuees from southern and northern communities who had to leave their homes because of the war with the Hamas terror group and to the hotels where they are staying.

More than 200,000 people have been displaced from communities along the southern and northern borders in the aftermath of the October 7 atrocities perpetrated by Hamas, which killed about 1,200 people, a majority of them civilians, including babies, children and the elderly, after some 3,000 terrorists burst into the country from the Gaza Strip by land, sea and air. The ongoing onslaught left towns and agricultural communities charred and largely uninhabitable.

Last month, the government announced that it will allocate about NIS 1 billion ($260 million) to a new agency dedicated to rehabilitating the ravaged southern Gaza border communities.

For now only NIS 115 million ($30 million) has been transferred to the so-called Tekuma (Revival) Administration, headed by Brig. Gen. (Res) Moshe Edri, and to war-affected local authorities and communities. Part of the remainder NIS 900 million, or about NIS 247 million, is expected to be transferred by the end of 2023 and the rest only in 2024.

National Unity party MK Farkash-Hacohen called on Smotrich to keep his promise and change the order of economic priorities already this year and turn them into actions.

View of the destruction caused by Hamas terrorists in Kibbutz Kfar Aza, near the Israeli-Gaza border, in southern Israel, October 15, 2023. (Edi Israel/Flash90)

“Divert the coalition funds, (…) and freeze coalition funds designated for 2024,” Farkash-Hacohen said. “This is what the public expects from you.”

Coalition funds are monies doled out to fulfill political promises that were made to ultra-Orthodox and far-right parties during wrangling to form a ruling government, and among them are funding to cash-strapped, private ultra-Orthodox schools.

Farkash-Hacohen’s plea comes as Smotrich on Friday announced a decision to freeze 70%, or some NIS 1.6 billion of the NIS 2.5 billion of coalition funds due to be paid in the current 2023 budget, to be redistributed to war needs.

Opposition leader MK Vladimir Beliak attacked Smotrich for effectively only releasing 18% out of a total of about NIS 9 billion from the coalition fund pool that has not been paid out from the two-year 2023-2024 budget. The remainder NIS 6.5 billion will be part of the 2024 budget, Beliak asserted.

Smotrich also announced that he planned to shave about NIS 4 billion from the 2023 budget, and increase war expenditure by another NIS 9 billion through the creation of an extra-budgetary “box” for home front and civilian expenses. That’s in addition to the NIS 22 billion already allocated to defense spending and combat expenses.

Meanwhile, the transfer of budget allocations of a total of NIS 1.35 billion designated to finance civilian war needs and assist evacuees is still awaiting approval. Last week, the Knesset Finance Committee was reportedly expected to discuss and approve the budget allocations.

Damage from a rocket impact in Ashkelon, October 13, 2023. (Courtesy: fire and rescue services)

The budget transfer includes NIS 250 million for grants to evacuated families, and NIS 200 million in grants to border communities in the south and north for evacuation expenses by local authorities. The lion’s share, or a total of NIS 628 million, is earmarked for funding emergency lodging in hotels to thousands of displaced. Until now, hotels hosting internally displaced have received an advance of NIS 93 million in government funding.

And another NIS 247 million in funds is allocated for the Takuma rehabilitation directorate.

People recognized as evacuees by the Defense Ministry’s National Emergency Authority are divided into three categories: residents living within five kilometers (three miles) of the border with Lebanon; those who live within four kilometers of the border with Gaza, and those who live four-to-seven kilometers of the Gaza border. Sderot, which has neighborhoods in both the second and third categories, falls under the third.

People in the first two categories are eligible for government-provided accommodation.

About 90,000 residents that were required to evacuate from their Gaza and northern border homes and communities were put up mostly in government-afforded hotels receiving daily meals and in other temporary residences across the country.

Another 35,000 residents that had to leave their homes and self-evacuated without state assistance are entitled to a daily government stipend of NIS 200 for an adult and NIS 100 for a child. It means that a family of four, including two children can get NIS 18,000 a month and a family with three children NIS 21,000. The government stipends will be paid through Bituah Leumi, or the National Insurance Institute, which has started to accept online claims.

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