Party subsidies

Last updated

Party subsidies or public funding of political parties are subsidies paid by the government directly to a political party to fund some or all of its political activities. Most democracies (in one way or the other) provide cash grants (state aid) from taxpayers' money, the general revenue fund, for party activity. Such funds may cover routine or campaign costs incurred by the party. Among the established democracies the United States, Switzerland and India are the most notable exceptions. Party subsidies can be relatively small (as in the U.K.) or quite generous (as in Sweden, Israel and Japan). In the U.S., the Presidential Fund takes money from the general fund only after authorized by a statement indicated upon a taxpayer's tax return.

Contents

The recipients of public support (in cash or kind) are party organizations, parliamentary groups (party caucuses) and/ or candidates for public office (parliament or presidency). In combination with rules that enforce fair access to and fair distribution of state aid among the players of the political game, government funding for political activity can be an acceptable policy option for democratic polities. The allocation of party subsidies follows general rules for access to and distribution of such grant, for example access for all parties represented in the national parliament and distribution in proportion to the number of seats held in the current parliament, or in proportion to the number of votes polled in the most recent election. Many subsidy schemes are linked to reporting and disclosure obligations for the recipient parties.

Rare instruments of party subsidies are matching funds and tax credits. Matching funds are granted to a political competitor who has proven to a government authority that he or she solicited small individual donations. Tax credits can be deducted by the taxpayer from tax liability because some part of a political donation is treated like an advance payment on tax. Because matching funds and tax credits depend on financial contributions by individual citizens such support is more compatible with a participatory concept of democracy than flat grants, which do not require specific efforts by the fundraising parties (or candidates).

In many democracies public funding for political parties was introduced after scandals, which revealed political corruption or illegal funding, had become public knowledge. In other countries, the rising costs of political competition stimulated the spread of party subsidies (government funding).

Although the mainstream opinion is in favour of party subsidies now, they are still disputed. [1] Supporters of party subsidies argue that directly providing the campaign funds reduces political corruption, as parties do not need to raise "money with an opinion/ strings attached".

History

In 1954 Costa Rica and Uruguay were the first countries to introduce party subsidies. They were followed by Puerto Rico in 1957 and West Germany in 1959. In the 1960s, Quebec (1963), Sweden (1965), Finland (1967) and Israel (1969) parties received such support. [2]

Since the 1970s, party subsidies have been introduced by Norway (1970), Canada and Italy (1974), Austria (1975), the U.S. (1976), Australia (1984), Denmark (1986), France (1988), Belgium (1989), Japan (1994), Ireland (1997), the Netherlands (1999), the U.K. (2000) and New Zealand (2010). Nowadays it is also used in Greece, Portugal, Spain and other more recently established democracies in Europe and Latin America: India and Switzerland stand out as exceptions. [3]

In Italy, following the abolition of the state financing of political parties, clear examples are initiatives of Prime Minister Matteo Renzi who organized on 6 and 7 November 2014, two fund-raising dinners, held respectively in Rome and Milan, for the Italian Democratic Party. [4]

Criticism

Critics argue that party subsidies: [5]

See also

Further reading

Related Research Articles

Campaign finance laws in the United States have been a contentious political issue since the early days of the union. The Bipartisan Campaign Reform Act (BCRA) of 2002, also known as "McCain-Feingold", is the most recent major federal law affecting campaign finance, the key provisions of which prohibited unregulated contributions to national political parties and limited the use of corporate and union money to fund ads discussing political issues within 60 days of a general election or 30 days of a primary election, until BCRA's provisions limiting corporate and union expenditures for issue advertising were overturned in Federal Election Commission v. Wisconsin Right to Life.

The Stefan Batory Foundation is an independent Polish non-government organization established by American financier and philanthropist, George Soros, along with a group of Polish opposition leaders of 1980s, and registered in Poland since May 1988. It is named after Stephen Báthory, the 16th-century Polish king. The Foundation’s mission is to support the development of an open, democratic society in Poland along with other Central and East European countries.

Campaign finance Political vote advocacy funding

Campaign finance, also known as election finance or political donations, refers to the funds raised to promote candidates, political parties, or policy initiatives and referenda. Political parties, charitable organizations, and political action committees are vehicles used for fundraising for political purposes. "Political finance" is also popular terminology, and is used internationally for its comprehensiveness. Political donations can also refer to funds received by political parties from private sources for general administrative purposes.

New Space (Uruguay) Political party in Uruguay

New Space is a moderate social democratic party in Uruguay.

A publicly funded election is an election which is funded with federal tax and/or income tax.

Matching funds are funds that are set to be paid in proportion to funds available from other sources. Matching fund payments usually arise in situations of charity or public good. The terms cost sharing, in-kind, and matching can be used interchangeably but refer to different types of donations.

Campaign finance in the United States is the financing of electoral campaigns at the federal, state, and local levels. At the federal level, campaign finance law is enacted by Congress and enforced by the Federal Election Commission (FEC), an independent federal agency. Although most campaign spending is privately financed, public financing is available for qualifying candidates for President of the United States during both the primaries and the general election. Eligibility requirements must be fulfilled to qualify for a government subsidy, and those that do accept government funding are usually subject to spending limits on money.

In the United States, a donor-advised fund is a charitable giving vehicle administered by a public charity created to manage charitable donations on behalf of organizations, families, or individuals. To participate in a donor-advised fund, a donating individual or organization opens an account in the fund and deposits cash, securities, or other financial instruments. They surrender ownership of anything they put in the fund, but retain advisory privileges over how their account is invested, and how it distributes money to charities.

The presidential election campaign fund checkoff appears on US income tax return forms as the question Do you want $3 of your federal tax to go to the Presidential Election Campaign Fund?

Political funding in Australia

Political funding in Australia deals with political donations, public funding and other forms of funding received by politician or political party in Australia to pay for an election campaign. Political parties in Australia are publicly funded, to reduce the influence of private money upon elections, and subsequently, the influence of private money upon the shaping of public policy. After each election, the Australian Electoral Commission distributes a set amount of money to each political party, per vote received. For example, after the 2013 election, political parties and candidates received $58.1 million in election funding. The Liberal Party received $23.9 million in public funds, as part of the Coalition total of $27.2 million, while the Labor Party received $20.8 million.

Political funding in the United Kingdom has been a source of controversy for many years. Political parties in the UK may be funded through membership fees, party donations or through state funding, the latter of which is reserved for administrative costs. The general restrictions in the UK were held in Bowman v United Kingdom to be fully compatible with the European Convention on Human Rights, article 10.

The financing of federal political entities in Canada is regulated under the Canada Elections Act. A combination of public and private funds finances the activities of these entities during and outside of elections.

Political finance covers all funds that are raised and spent for political purposes. Such purposes include all political contests for voting by citizens, especially the election campaigns for various public offices that are run by parties and candidates. Moreover, all modern democracies operate a variety of permanent party organizations, e.g. the Democratic National Committee and the Republican National Committee in the United States or the Conservative Central Office and the Labour headquarters in the United Kingdom. The annual budgets of such organizations will have to be considered as costs of political competition as well. In Europe the allied term "party finance" is frequently used. It refers only to funds that are raised and spent in order to influence the outcome of some sort of party competition. Whether to include other political purposes, e.g. public relation campaigns by lobby groups, is still an unresolved issue. Even a limited range of political purposes indicates that the term "campaign funds" is too narrow to cover all funds that are deployed in the political process.

Party finance in Germany is the subject of statutory reports, which up to 35 parties file annually with the administration of the German parliament. Important questions pertaining to political party funding can be answered by analysing the data given in these financial reports: How much money is raised and spent by each party operating in Germany? What assets are at the disposal, which debts are on the books of German parties? For which purposes did parties spend their funds? From which itemized sources did a specific party collect its revenue? Who are the donors of major contributions and how much did each donor give during a specific calendar year?

Political Party Funding(PPF) is a method used by a political party to raise money for campaigns and routine activities. The funding of political parties is an aspect of campaign finance.

The term corporate donation refers to any financial contribution made by a corporation to another organization that furthers the contributor's own objectives. Two major kinds of such donations deserve specific consideration, charitable as well as political donations.

By and large political finance in the Netherlands is a party matter. Compared to other nations the spending level is quite moderate, annually about €2,40 per voter.

Party funding in Austria has been subject to public regulation and public subsidies since 1975. Although the demarcation between campaign financing and routine activities due to overlapping election cycles and "permanent campaigning" is quite difficult, Austrian law has for a long time provided for separate subsidies from the federal budget. So have done the nine states of the Austrian federation and some municipalities.

Political funding in Ireland has re-emerged as an issue of public policy quite recently when in 2012 the Electoral Act of 1997 was amended to cover basic needs of transparency and control.

Party funding in Israel is political financing in Israel that covers the funds raised and spent to influence political competition between political parties, especially the campaigns for national (Knesset) and municipal elections as well as the routine operation of party organizations. Ever since the Yishuv. the pre-state formation of Jewish life in Eretz Israel, political parties have been the foremost organizations of the polity.

References

  1. ↑ Cf. Pinto-Duschinsky: 'it's their party, and we pay for it', in: The Sunday Times, October 22, 2006 - http://www.timesonline.co.uk/tol/comment/article608907.ece.
  2. ↑ Alexander, Herbert E. (ed.): Comparative Political Finance in the 1980s, Cambridge, UK et al.: Cambridge University Press, 1989, pp. 14/15.
  3. ↑ Casas-Zamora, Kevin: Paying for Democracy. Political Finance and State Funding of Parties, Colchester, UK: ECPR, 2005, pp.30/31.
  4. ↑ "Renzi at Democratic Party Fund-raising Event: "We need your ideas, not just one thousand Euros"". TheRword News . Retrieved 13 November 2014.
  5. ↑ For a brief compilation of pros and cons see Casas-Zamora; Paying for democracy. Polirtical finance and state funding for parties. Colchester, UK: ECPR Press, pp. 28/29.
  6. ↑ The argument to the contrary was already published in: Alexander, Herbert E. (ed.): Political Finance in the 1980s, Cambridge UK et al: Cambridge University Press, 1989, pp. 248/249.
  7. ↑ The Greens (Die Grünen) and the Pirate Party (PIRATEN) in Germany are examples to the contrary after they had survived their very first, unsuccessful election bids. Cf. external link to the distribution of party subsidies in that country.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.