Israel country brief

Overview

Australia and Israel share a close relationship with significant people-to-people and commercial links. Australia established diplomatic relations with Israel in 1949. The Australian Embassy in Tel Aviv, and the Israeli Embassy in Canberra, were both opened in that year.

Political overview

The State of Israel is a robust parliamentary democracy. The Knesset (parliament) is made up of 120 members elected every four years on the basis of proportional representation. The Prime Minister is a member of the Knesset, although Ministers need not be. The President is the Head of State, a largely ceremonial role, and is elected by a secret Knesset vote for a single seven-year term.

The current Israeli Government is led by Prime Minister Netanyahu. Netanyahu’s Likud party heads a coalition of parties (Kulanu, Jewish Home, Shas and Agudat Israel) after the March 2015 elections.

Bilateral relations

Australia has a warm and close relationship with Israel, which is supported strongly by Australia’s active Jewish community. The relationship has a strong historical dimension, dating back to the First World War when Australian forces fought in the region, including in modern-day Israel, alongside their Allied Counterparts against the Ottomans. Australia was the first country to vote in favour of the 1947 UN partition resolution.

Australia and Israel have a healthy commercial relationship with two-way trade worth $1.2 billion (20145-15). Our major merchandise export to Israel is live animals ($68 million), followed by aluminium ($26 million) and coal ($15 million). There are opportunities for Australian companies to take greater advantage of Israel’s knowledge-based technologically advanced economy – particularly in areas of biotechnology, ICT, education and training. Investment is also growing. We encourage Israeli companies to view Australia as a regional base and as a supplier of sophisticated goods and services.

Australia is deepening bilateral cooperation with Israel, in particular around innovation. In December 2015, Tel Aviv was announced as one of five offshore innovation Landing Pads as part of the Government’s National Innovation and Science Agenda. Australia is also negotiating a number of treaties with Israel on innovation and a double taxation agreement.

People to people links

Australia’s relations with Israel are underpinned by a vibrant Australia-Jewish community, which numbers about 90,000. There are 9,229 Israel-born people living in Australia, an increase of 18.5 per cent from 2006 (2011 census). People born in Israel mostly live in Victoria (44 per cent) and NSW (36.6 per cent). It was recently estimated that Australia has the highest number of Holocaust survivors per capita in the Jewish Diaspora.

Economic overview

Israel has a technologically advanced market economy with substantial, though diminishing, government participation. It depends on imports of crude oil, grains and other raw materials. Despite limited natural resources, Israel has intensively developed its agricultural and industrial sectors over the past 20 years. Israel imports substantial quantities of grain, but is largely self-sufficient in other agricultural products.

High-tech exports fuelled Israel’s high economic growth in the 1990s, reaching a high of 7.4 per cent in 2000 before slowing in subsequent years. In the last five years the economy has grown steadily, and continuing strong foreign investment, tax revenue, and private consumption levels have helped the economy recover quickly from shocks such as the conflict with Hizballah in 2006. Recent forecasts estimate that the Israeli economy will grow between 2.8 and 3.0 per cent year-on-year in the next two years (2016, 2017). GDP growth was 2.5 per cent in 2015.

The key industries driving the Israeli economy are ICT and oil and gas, with Israel’s IT market one of the most developed in the world, shaped by a sophisticated system of major global investors, start-ups and universities engaged in industry research. Google’s June 2013 purchase for US$1 billion of Waze, the Israeli instant navigator software maker, shows to what extent Israeli technology has become globally relevant. For information on doing business and opportunities in Israel please see the Austrade website.

Palestinian Territories

Australia is a long-standing supporter of a negotiated, two-state solution to the Israel-Palestinian issue. Our aid to the Palestinian Territories (PTs) is a tangible demonstration of this support. Our assistance is helping to strengthen the economic and social foundations of a future Palestinian state which can provide jobs and services for its people. Since 2010-11, Australia has provided over $285 million in development assistance in the Palestinian Territories. Our main aid partners are the UN Relief and Works Agency for Palestinian Refugees in the Near East (UNRWA), civil society and the Palestinian Authority.

The 2015 United Nations Human Development Report, measuring life expectancy, standard of living and education, rated the PTs (consisting of the West Bank and Gaza Strip) 113 out of 187 countries, among the poorest in the Middle East. Some 22 per cent of the Territories’ people are food insecure, 26 per cent live in poverty and 25 per cent are unemployed. These figures have all deteriorated over the past 20 years. The Gaza Strip experiences development constraints akin to the West Bank but is further challenged by extreme population density, heavier restrictions on the movement of people and goods and a tiny land mass.

Australia has a long history of supporting Palestinians. Our development program focuses on strengthening the economy, building institutional capacity and providing services.

Improved public financial management and a more competitive agricultural economy in the PTs

Well-functioning institutions and a robust economy are important building blocks for a viable state. Australia is supporting agriculture as a driver of economic growth and a tool for strengthening community fabric through the third phase of the Australian Middle East NGO Cooperation Agreement (AMENCA 3). We support the Palestinian Authority’s public financial management capacity through the World Bank’s Palestine Reform and Development Plan Trust Fund. The provision of Australia Awards continues to enable Palestinians to influence their futures and their institutions. Our scholarships focus on academic disciplines that support agriculture and private sector development.

Palestinian refugees are able to access quality basic services

We are supporting UNRWA to provide education and health services to Palestinians and to improve living conditions in refugee camps. We have provided targeted and responsive humanitarian assistance after conflict through trusted partners such as UNRWA, UNICEF and Australian NGOs. We support Australian and Palestinian NGOs and civil society organisations through AMENCA 3, the Direct Aid Program (DAP) and the Australian NGO Cooperation Program (ANCP) to provide local solutions to local problems.

Our results

  • Australian funding to UNRWA contributed to universal primary education for half a million Palestinian refugee children (half girls) attending school and supported over 9.5 million patient visits at health centres in 2014-15.
  • Safe drinking water and sanitation facilities in 121 disadvantaged schools, benefited over 71,400 students (31,119 girls) and increased knowledge and awareness of hygiene practices of 35,000 people since 2012.
  • Our previous NGO program, the Australia Middle East NGO Cooperation Agreement - Phase 2 (AMENCA 2) facilitated more than $80 million in additional agricultural produce between 2011 and 2015.
  • Scholarships to 40 Palestinians (including 11 women) since 2011, which support public sector management skills within the PA, legal expertise in universities and agriculture sector development.
  • Our funding to UNRWA helped repair 70,000 damaged or fully destroyed homes after the Gaza conflict in 2014.
  • Through the International Committee of the Red Cross (ICRC), enabled the improvement and restoration of water supplies to 600,000 people and the rehabilitation of five damaged hospitals restoring an overall capacity of 422 beds after the Gaza conflict in 2014.

Development Assistance

More information on development assistance to the Palestinian Territories.


Last Updated: 15 September 2014