Charities funding Israel’s illegal settlements untouchable, Labor says

Australian charities do not and will not have to comply with international law, the Labor Government has told the Senate. Stephanie Tran reports.

The Albanian government has rejected a proposal to strip the tax-deductible status of Australian charities found to support illegal occupations, amid increased scrutiny on donations to Israeli settlements and the Israel Defense Forces (IDF).

MWM identified 5 charities that sent money to the Israel Defense Forces or parties linked to illegal West Bank settlements in Occupied Palestine.

proposed changeIntroduced by Greens senator Mehreen Faruqi, the legislation would expressly ban organizations from receiving discounted gift recipient (DGR) status if they are found to be supporting an “illegal occupation”.

“It’s bad enough that people are sending money to support the Israeli army’s war crimes and expand illegal, violent settlements in the West Bank, but it’s completely outrageous that Australian taxpayers are subsidizing these settlements,” Faruqi said.

Supporting these heinous crimes deserves an investigation, not a tax deduction.

The amendment was accepted in the Senate Amending Treasury Laws (Supporting Elections in Retirement and Other Measures) Draft Law 2025will add a new provision to the law Income Tax Assessment Act 1997 To deny DGR approval to any organization that “advocates, prepares, plans, assists, finances, encourages, supports … or contributes to the establishment, maintenance or expansion of illegal occupation.”

This would also give the secretary of state the power to officially declare what constitutes an “unlawful occupation” for the purposes of the law.

Charities that fund illegal settlements

This year, MWM It has published a series of investigations revealing that Australian charities funneled tax-deductible donations to projects linked to Israeli settlements in the occupied West Bank and to initiatives supporting IDF soldiers, which are illegal under international law.

inside Senate debate Commenting on the amendment, Greens Senator Penny Allman-Payne said: MWM investigations.

He highlighted figures showing that the Australian Jewish National Fund has transferred more than $125 million to Israel since 2009, while the United Israel Appeal Refugee Assistance Fund, through Keren Hayesod, has transferred approximately $376 million since 2013, with some of these funds being used for settlement expansion and IDF-related programs.

Allman-Payne also touched on the activities of the Chai Charitable Foundation, which earlier this year hosted fundraising events for organizations that provide direct support to IDF soldiers and residential communities, including Tekoa and Hebron; The campaigns were subsequently removed after being questioned by . MWM.

“It is clearly concerning that there are charities in Australia funneling funds to illegal squatters and illegal settlements,” Allman-Payne told the Senate.

It said the Australian Charities and Not-for-Profits Commission (ACNC) received 896 complaints about 88 charities in connection with the Israel-Gaza conflict between October 2023 and December 2025.

“Given that these donations are tax-deductible, this means taxpayers are supporting illegal occupation and militarization,” he said.

Millions of dollars in tax-deductible donations to the IDF and illegal settlements

In response, Finance Minister Katy Gallagher stated that the government would not support the Greens’ amendment, arguing that existing regulatory frameworks already prohibit illegal behavior by charities.

“There is no DGR category or purpose that allows aid agencies to support illegal activities at home or abroad,” Gallagher said.

He noted the ACNC’s governance standards that require charities to operate legally and remain accountable, as well as external standards of conduct that govern overseas activities.

But Gallagher acknowledged there was a significant limitation: These standards require compliance with Australian law, but

It does not cover conduct within the scope of international law.

It said charities operating overseas must take “reasonable steps” to ensure proper management and compliance with Australia’s legal obligations, including sanctions, anti-money laundering and counter-terrorism financing laws.

Organizations found to be in violation risk losing their charity registration, which could lead to loss of DGR status.

Gallagher suggested that concerns about specific organizations should be referred to the ACNC for investigation.

Faruqi said the government’s stance amounted to deliberate inaction.

“The Labor Government clearly want to bury their head in the sand and look the other way while this is happening,” he said.

“This is another example of the Government’s complicity in the ethnic cleansing of Palestine.

It is hypocritical for the government to say that it supports the Palestinian state, while at the same time actually financing the destruction of this state.

Minister Gallagher and Andrew Leigh (Assistant Secretary for Productivity, Competition, Charities and the Treasury) have been contacted for comment.

A spokesperson from Leigh’s office responded:

“The government expects all registered charities to meet their regulatory obligations and comply with all Australian laws. This is a condition of maintaining charity status.”

“The ACNC is the independent regulator of charities and complaints that could harm people or involve the misuse of a charity for terrorist purposes or promoting extremism are a compliance priority for the ACNC. The ACNC has the power to revoke the charitable status of charities that are currently engaged in serious unlawful activity.”

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