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, which ultimately led to the creation of Israel as a nation state.

Australia and Israel have a healthy commercial relationship. Israel is Australia’s 37th largest merchandise trading partner and 50th largest export market (goods and services). In 2015-16, two-way goods and services trade amounted to $1.3 billion, of which Australian exports were worth $349 million and imports from Israel $952 million.  In 2015, Australian investment in Israel totalled $663 million and Israeli investment in Australia was $262 million, mostly centred in the innovation sector.  Major merchandise exports to Israel are live animals  followed by aircraft, spacecraft and parts.

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. The Tel Aviv Landing Pad, which was established within the SOSA (south of Salame) innovation hub in June 2016, serves as a bridge between the Australian and Israeli innovation ecosystems, and offers Australian companies and entrepreneurs a platform to build linkages with both Israeli and multi-national business partners.  Australia concluded an Air Services Agreement and a Technological Innovation Cooperation Agreement in February 2017 during Prime Minister Netanyahu’s state visit to Australia, the first by a sitting Israeli Prime Minister.  A Working Holiday Agreement was concluded in June 2016.  Negotiations are in train for a Double Taxation Agreement. 

People to people links

Australia’s relations with Israel are underpinned by a vibrant Australia-Jewish community, which numbers about 120,000. 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).

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. In recent years Israel’s economy has continued to grow steadily.   Ongoing strong foreign investment, tax revenue, and private consumption levels have helped it recover quickly from shocks such as tmilitary conflicts. Recent forecasts estimate that the Israeli economy will grow up to 3 per cent in 2017. GDP growth was 2.5 per cent in 2015.

The key industries driving the Israeli economy are ICT and oil and gas. Israel has a strong innovation and technology business culture, with an eco-system for start-ups that has been ranked as the best in the world outside the US, a reported level of venture capital activity described as the highest per capita in the world, and more than 275 multinational R&D centres present in the country.  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. In 2016-17, Australia will provide  $43.6  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.

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 9.1 million patient visits at health centres in 2015-16.
  • Safe drinking water and sanitation facilities in 52 disadvantaged schools, benefited over 30,400 students in 2015-16.
  • 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 have been awarded to 51 Palestinians (including 16 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.
  • More effective public institutions in the Palestinian Territories (as assessed by the World Bank and IMF).

Development Assistance

More information on development assistance to the Palestinian Territories.


Last Updated: 24 February 2017