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Select Committee on Finance and General Affairs debate -
Tuesday, 8 Apr 1997

SECTION 17.

I move amendment No. 88:

In page 14, subsection (1), lines 34 to 36 to delete "signed by the officer, stating that the payments were employed for the purpose of furthering the aims and objectives of the party" and substitute "in the form directed by the Public Offices Commission, signed by the officer, stating that the payments were applied to some or all of the purposes referred to in section 16 (1)".

Section 17(1) requires each qualified party to furnish to the Minister for Finance a statement in writing signed by the appropriate officer of the party stating that the payments received by the party were used to further that party's aims and objectives, indicating the matters to which the payments were applied and including details of amounts applied to the promotion and participation of young people and women in political activity. This amendment is consequential on the insertion of a new provision in the Bill by way of an earlier amendment which requires parties to use funds received under this Bill on matters specified in that section. Under this amendment, statements to be furnished by each qualified party which receives funding under the Bill must be in the form directed by the Public Offices Commission and must state that the payments were used for some or all of the purposes referred to in the new provision inserted in an earlier amendment. The existing requirement in section 17(1), which requires the statement to indicate the matters to which payments were applied, including the amounts used for the promotion and participation of women and young people, will be retained. I ask the committee to accept this amendment.

Is it intended that these declarations and so on will be open to the public?

The statements will be laid before the Houses of the Oireachtas.

Will all the detail required be included?

Full statements will be laid before the Houses of the Oireachtas.

Amendment agreed to.

Amendment No. 89 is related to amendment No. 93 and both may be discussed together. Is that agreed? Agreed.

I move amendment No. 89:

In page 14, subsection (2), line 41, to delete "qualified" and substitute "public".

These amendments, which are purely technical, provide for the substitution of the term "public auditor" for the expression "qualified auditor" in section 17. Section 17, as drafted, requires a political party which receives payments under Part III to furnish to the Minister for Finance each year a statement relating to the use to which such payments were put. The statement must be audited by a qualified auditor which is defined as a person qualified for appointment as auditor of a company under section 162 of the Companies Act, 1963.

Other legislative codes such as the Industrial and Provident Societies Acts, the Friendly Societies Act and the Seanad Electoral (Panel Members) Acts used the term "public auditor". This is considered a more appropriate term as the expression "qualified auditor" is one which was defined specially for this Bill and does not appear to exist elsewhere in existing law. It is preferable to use an existing expression which is already defined in section 182 of the Companies Act, 1990. The definition proposed by this amendment is the same as that defined by the 1990 Act. I ask the committee to accept this amendment.

Amendment agreed to.

Amendments Nos. 90, 91 and 92 are related and may be discussed together. Is that agreed? Agreed.

I move amendment No. 90:

In page 14, subsection (2), line 42, to delete "Minister for Finance" and substitute "Public Offices Commission".

To repeat what was said earlier, I do not understand the reason for a Public Offices Commission for ethics in Government and public office and Electoral Acts if we continue to send the information to the Minister for Finance. Surely, we should deposit this information with the Public Offices Commission which should certify whatever necessary. Perhaps the Minister will explain why we have a Public Offices Commission but keep sending information to the Minister for Finance which will end up in the Public Offices Commission. I do not believe there are any ideological hang ups on either side of the House on this matter. I do not understand the reason the Public Offices Commission will deal with the Electoral Acts when we will send everything to a Minister. Perhaps the Minister of State will consider this amendment and come back to me on it.

If the Deputy withdraws the amendment, we will look at it again. We had the same argument earlier. The Minister is responsible and should be furnished with the information through this procedure. The Opposition often criticises Ministers for not being involved and adopting a hands on approach. I am not saying this is an argument for a hands on approach but the Minister ultimately carries the can and that must be taken into account. If the Deputy withdraws his amendment, we will look at this issue which he raised earlier.

I am arguing against Ministers doing a job while setting up quangos. I understand the Minister is responsible and will be answerable, but he should not be involved in the daily administration of this because the Public Offices Commission has been set up. I foresee a section in the Department of Finance dealing with the Electoral Acts and the Ethics in Public Office Act. God knows how many other places within which this matter will be dealt. It is a waste of money and resources. We should set up a section in the Department of the Environment, which would give it a little more to do than drawing maps for the census about which we spoke on the last day, and not a Public Offices Commission and then give the work to the Minister for Finance or the Minister for the Environment.

I assure the Deputy that is not what we are doing -there is no duplication in that regard and there is no cost involved. The certification procedure is clearly laid out in section 86. I dispute the spin the Deputy has put on this.

The Minister of State mentioned auditors and the Companies Acts. On the vexed question of VAT payment, political parties cannot claim back VAT unlike any other business. Some 21 per cent of everything political parties spend goes back to the Exchequer. Everything is 21 per cent more expensive for them than for other business which can claim back VAT. Has any consideration been given to giving tax exempt status to political parties or the repayment of VAT which happens in some cases?

We are not dealing with that issue in this Bill. I suppose it is a matter for the Minister for Finance. The question of VAT does not arise in this legislation. Some companies cannot claim back VAT.

Virtually every company can claim back VAT.

I do not believe medical practices, for example, can claim back VAT. I imagine many businesses are not in a position to do so. The issue of child care was raised recently.

The question has not been considered.

Not in this Bill.

As director of elections on a number of occasions, one gets quotations for services and goods plus 21 per cent VAT, which other businesses can claim back. It is an anomaly which should be considered. Political parties will be thought of as receiving huge amounts of money but the net sum will be a great deal less than the gross sum quoted earlier.

Payments are tax free. No income tax is paid on this so there is a benefit. Many small companies cannot claim back VAT.

Is it that they are below the tax limit?

Perhaps we are looking at things from different perspectives in terms of large and small parties. This issue is not included in the Bill.

It is an issue which occurred to me. It is a problem which should be discussed. The figures parties get from the Exchequer should be net rather than gross figures.

Amendment, by leave, withdrawn.
Amendments Nos. 91 and 92 not moved.

I move amendment No. 93:

In page 14, lines 48 to 50, to delete subsection (4) and substitute the following:

"(4) In this section ‘public auditor' means a public auditor for the purposes of the Industrial and Provident Societies Acts, 1893 and 1978, and the Friendly Societies Acts, 1896 to 1977.".

Amendment agreed to.
Section 17, as amended, agreed to.
NEW SECTION.

I move amendment No. 94:

In page 15, before section 18 to insert the following new section:

18.—(1) (a) Subject to paragraphs (b), (c) and (d), election expenses shall be reimbursed to a candidate at a Dáil general election or bye-election who—

(i) is elected at the election; or

(ii) is not so elected but the greatest number of votes credited to him or her at any stage of the counting of votes at the election exceeds one quarter of the quota.

(b) (i) The amount of election expenses which may be reimbursed to a candidate under this section shall be the actual expenses incurred by the candidate or five thousand pounds, whichever is the less.

(ii) Election expenses deemed to have been incurred by a candidate of a political party under section 29 (1) (b) shall be reckoned for the purposes of this section.

(c) Subject to paragraph (d), payments in respect of the reimbursement of election expenses under this section shall be made by the Minister for Finance out of the Central Fund or the growing produce thereof to each candidate referred to in paragraph (a) who applies therefor to the Public Offices Commission.

(d) No payment in respect of the reimbursement of election expenses of a candidate shall be made under this section unless and until the Public Offices Commission has—

(i) certified to the Minister for Finance that the relevant statement of election expenses and statutory declaration have been furnished by the election agent of the candidate to the Commission under section 32,

(ii) certified to the said Minister that the said statement was completed in accordance with guidelines issued by the Commission under section 3, and complies with the provisions of Part V, and

(iii) furnished to the Minister for Finance details of the amount of the actual expenses incurred by the candidate.

(e) The Public Offices Commission shall furnish to the Minister for Finance, as soon as may be after consideration by it of an application for reimbursement of election expenses under paragraph (c) and the statement of election expenses furnished to it in respect of the candidate under section 32, the details referred to in paragraph (d) in respect of each candidate who is eligible for reimbursement of election expenses at an election.

(f) (i) Where a candidate referred to in paragraph (a) dies after the close of the poll at an election and has not made an application for the reimbursement of election expenses under this section, an application for the reimbursement of the said candidate's election expenses may be made by, and where appropriate, the payment may be made to, the personal representative of the candidate.

(ii) Where a candidate referred to in paragraph (a) dies after making an application for the reimbursement of election expenses under this section and before payment is made to the candidate, payment in respect of the reimbursement of the said candidate's expenses may be made to the personal representative of the candidate.

(g) Every payment made to a candidate, or the personal representative of a candidate, as the case may be, under this section shall not be liable to income tax.

(2) (a) The Minister may make regulations providing for the reimbursement of election expenses of candidates at a presidential election or a European election and may make provisions corresponding to the provisions of this section subject however to any modification in those provisions appearing to the Minister to be appropriate.

(b) Without prejudice to the generality of paragraph (a), regulations under this subsection may make provision for all or any of the following matters:

(i) the criteria for the reimbursement of election expenses to candidates;

(ii) the amount of expenses which may be reimbursed;

(iii) the method of payment in respect of the reimbursement of such expenses; and

(iv) the procedure in relation to the reimbursement of election expenses where a candidate dies.

(3) Where regulations under this section are proposed to be made, a draft thereof shall be laid before each House of the Oireachtas and the regulations shall not be made until a resolution approving of the draft has been passed by each House.

(4) In this section the expression ‘election expenses', in so far as it relates to Dáil or European elections, has the meaning assigned to it in section 28 and, in so far as it relates to presidential elections, has the meaning assigned to it in section 44.".

I move amendment No. 1 to amendment No. 94:

In subsection (1), to delete paragraphs (a) and (b) (i) and substitute the following:

"(a) Subject to paragraphs (b), (c) and (d), election expenses shall be reimbursed to the political party which authenticated the candidature of each candidate who, at the general election or a bye-election—

(i) is elected, or

(ii) is not so elected, but has the greatest number of credited votes to him or her at any stage of counting of votes in the election exceeds one quarter of the quota.

Is the amendment being pressed? It has already been discussed with amendment No. 66.

I would like to discuss it again.

I will allow a brief discussion.

We oppose this section and the concept of reimbursement of election expenses of candidates. Subsequent to the discussion on amendment No. 66, the Minister indicated he will press ahead with the proposal for paying the expenses of election candidates up to a maximum of £5,000. In light of this, my amendment proposes that the election expenses should be reimbursed to the political party which authenticated the candidature of each candidate and on the same basis for reimbursement as the Minister proposed, which is if a person is elected or has a quarter of the quota. If political parties are to authenticate the candidature of a person, the Bill should allow for the party to be reimbursed. In other words, the £5,000 would be repaid to the political party. Independents would be entitled to be reimbursed personally.

The Deputy's amendment runs contrary to the emphasis in the McKenna judgment on equality in the electoral system. The proposed new section is part of the package under which payments would be made to political parties and to candidates based on performance at election. The advice available to me is that all candidates must be treated equally in this regard. Presumably political parties can come to agreement with their candidates on repayment of expenses but we must ensure all candidates are treated equally, regardless of whether they are members of political parties.

I accept the point the Minister of State makes but, from advice I have received, there is no imperative following the McKenna judgment to pay people to stand for election. I understand the Minister's argument that my amendment could be construed as payments being made to political parties. My advice is that, under Article 15 of the Constitution, political parties are entitled to assistance from the State through the leaders' expenses once they are members of this House. Provision was made in the previous section for anyone who achieves 2 per cent of the vote and this adequately meets the McKenna judgment, so there is no necessity for the State or taxpayers to pay people £5,000 to stand for election.

I appeal to the Minister of State to remove this section. It will not do the political system, political parties or the body politic any good to put it into the legislation. My advice is that it is unnecessary under the McKenna judgment. The previous section, which provides for funding for people who receive 2 per cent of the vote, is dubious but this one is unnecessary and I ask the Minister to carefully consider withdrawing it.

There is potential here for many problems and yet, I am disposed to the Minister's proposal on the basis that there is too much rigid central control. An overweening democratic centralism has crept into politics in many areas. On the other hand, I can see a great deal of conflict where parties, which are expected to control overall expenditure in a constituency, fund their candidates' election campaigns and one is elected or reaches the required quarter of the quota and refuses to surrender the money to the party which funded their election. I think that is the Deputy's point. Someone told me the Labour Party has a pledge to return the £5,000 as part of the party pledge made by candidates at conventions. On the other hand, we have seen how easily these pledges are cast aside. What of the situation where someone pays nothing towards their election expenses? Their party raises the £5,000 which the candidate pockets.

The McKenna judgment has a bearing on this. We cannot simply look after political parties. We have to acknowledge that provision for all candidates must be on the basis of equality. Political parties must ensure that they have a good relationship with their candidates. Candidates must be treated equally regardless of whether they are a member of a political party. If we establish two systems we will not meet the requirement set down in the McKenna judgment. Candidates must also make statements in relation to——

If £5,000 is not given to anyone one is treating everyone equally.

That is not correct because one is providing political parties with funding.

They cannot use that money for electoral purposes. The McKenna judgment clearly stated that public funds could not be used for electoral purposes. We have passed a section which clearly states what the funding given to political parties is to be used for. It excludes electoral purposes, referenda, elections to Udarás na Gaeltachta and local Government and European elections.

The Minister proposes to allow a £5,000 grant for people to stand for election. My party does not pay me to stand. Deputy Penrose will verify that former Deputy McLoughlin paid Labour Party expenses out of his own pocket. That is common. Political parties do not pay towards election expenses. We are all equal in that we cannot spend taxpayers' money on elections or referenda. The Minister's proposals are not required on the basis of the McKenna judgment or equity.

Is the Deputy saying they should not be paid?

The Government is committed to providing three pillars to this provision — political parties, the leaders of parties and the candidates. This is a fair balance. It costs money to stand for election. People are limited because they cannot afford to stand, which is a problem. If a party is putting forward a candidate, it should come to a workable arrangement with the candidate. These management issues are part of party organisation. This provision is based in equality. The amendments are not saying that no one should get anything. They are saying that where someone is standing for a party, the party should be reimbursed. That introduces an element of inequality.

The Minister was not here for that amendment. We discussed this under amendment No. 66. My original proposal called for the deletion of all references to payments. This has arisen again because the Minister would not accept the previous amendment.

I do not wish to reopen that discussion. This amendment introduces an element of inequality in relation to the treatment of candidates.

We are trying to square the circle. There is a difficulty and the Bill does not appear to recognise the fact that we have multi seat constituencies. The larger parties will often have more than one candidate for the same ticket. One has to distinguish between the party locally and nationally. In almost every instance, the election is paid for by the party locally without any support from the party nationally. Where there is more than one candidate, there may be additional personal expenditure by some candidates. Alternatively, everything may be funded by the party.

There should be provision in the Bill to enable internal arrangements to be made between candidates and their agents for the payment of these funds. We need to insert an amendment which states that, where a candidate has agreed arrangements in advance with his agent, only then should the £5,000 be paid to the agent.

There is no need for the Bill to provide for such an arrangement.

The problem is that, after elections, there will be disappointed candidates going back on everything they said. In the meantime, the party has spent the money. The Bill is bending over backwards to be fair to small parties or independents. However, there is no provision for the larger parties.

The new section provides for the reimbursement of election expenses to candidates at a Dáil election who obtain more than one quarter of the quota. Expenses incurred by the candidate, including the amount spent on the candidate's behalf by the party subject to a maximum of £5,000, may be reimbursed to the candidate. Eligible candidates will be required to apply for reimbursement to the Public Offices Commission. That applies to all candidates and it must stand.

If a political party is not able to make satisfactory arrangements with a candidate there is a question mark as to whether they should be running that candidate. Parties are being provided with funding, not for election purposes, but to ensure that they run administrations which meet the needs of their organisations and are accountable. Good management is part of running a political party and it should not be part of the Bill. The Government is committed to ensuring that there are the three elements to the package. All candidates must be treated fairly.

It is not just down to good management. For instance, the party pledge is not enforceable in law. The Minister is not addressing the situation where there is more than one candidate. In such situations there must be provision for a co-ordinated statement of account between the candidates. This gap will leave a major lacuna which will very quickly give rise to conflict.

A later section deals with statements from candidates. Deputies have already said candidates contribute to their election expenses. The argument could be made that if the party is to receive this money, where do the candidates stand? There is always a cost involved, often a considerable cost, and perhaps the requirement of the statement can be examined in more detail on the later section. We are talking about candidates going forward on an equal footing regardless of their position within or relationship with their political party. I cannot introduce an element of discrimination or inequality as proposed by this amendment. i understand why Deputy Dempsey has put it forward but it introduces unequal treatment between those who stand for political parties and those who do not. What kind of political parties have we got if they cannot resolve this problem internally?

I can cite a dozen instances in different parties. We are refusing to recognise the reality of a multi-seat constituency and multi-candidate panels as is the norm for the bigger parties. Conflicts arise between candidates of the same party and to talk of goodwill or good management defies what frequently happens. Nobody wishes the Minister to introduce an unfair measure but we must recognise the real problem. The Minister is correct in saying the rights of candidates and the rights of the party have to be balanced. However, we need to consider the insertion of provisions allowing for an arrangement between candidates where there is more than one. This would deal with the issue raised by Deputy Dempsey.

I recognise there are problems. However, my advice is that I cannot deal with them in this Bill. The McKenna judgment established a principle of which I am in favour. Whether we like it or not we must adhere to it. This amendment does not adhere to that principle so it is not possible for me to accept it. Legislation cannot deal with all problems.

Legislation should within reason anticipate the problems that may arise and I can see problems arising within weeks.

Statements are covered in the Bill. Political parties are benefiting and we should not underestimate this.

Not for elections.

I accept that.

The problem is that the grant of £5,000 is unnecessary. It will cause problems for political parties. My amendment is designed to overcome that problem. It is fine to approach this from the point of view of a party with five or six deputies where there will only be one candidate in each constituency. The Minister's party is Dublin based with the exception of Senator Sherlock.

I do not agree with that. I am a County Wicklow Deputy.

I should have said the greater Dublin area where there is a very tightly knit organisation. In my party and the Chairman's party there are at least two or three candidates in each constituency. It is great if there is only one candidate in each constituency with one obvious person for the nomination. There would never be walkouts after conventions. One can talk about discipline or administration but it is a waste of time even after an election if the candidate is not elected and believes the director of elections was unfair. If somebody gets the idea he was unfairly treated during an election campaign all administration and pledges go out the window.

Perhaps we should conclude discussion of my amendments given that the Minister will not accept them and talk about opposing the section.

Amendment No. 1 to amendment No. 94, by leave, withdrawn.
Amendment No. 2 to amendment No. 94 not moved.

If the new section is inserted according to amendment No. 94, section 18 in the Bill will be deleted.

Is the Minister replacing section 18 with the new section proposed in the amendment?

Are we agreeing to the Minister's amendment with the assurance of further discussion of the points raised?

I have withdrawn my amendment to that amendment. I am opposing this section of the Bill and I ask the Minister to withdraw the amendment where it concerns the payment of election expenses to candidates. My information is that it is unnecessary in the light of the McKenna judgment. It is a nice proposal for parties with one candidate in each constituency as it ensures a reasonable election fund for them. It is nothing to do with the McKenna judgment. Before politics, the body politic, politicians and political parties are brought into total disrepute by people being paid a grant of £5,000 to stand for election I am asking the Minister to withdraw this and amend the Bill accordingly. The day is not far off, be it three weeks, three months or whatever, when we will go knocking on people's doors looking for votes. It will be thrown in our faces left, right and centre that we are being paid to canvass. This is something which is not necessary, is a grave mistake and should be withdrawn by the Minister.

I will not withdraw this amendment. It is not a question of it being a nice amendment which will suit certain parties. This is a fair proposal which will enable candidates, of whatever persuasion, to stand for election and to have some support in doing so. There is no question of paying people to canvass or stand for election. There are certain criteria which will have to be met before this money can be availed of. Nobody will be forced to accept £5,000 if it is against their moral convictions to do so. Criteria will have to be met particularly in regard to candidates having to reach one quarter of the quota. Perhaps it would suit the Deputy better if we gave money to everybody, without having any criteria, but that is not a practical solution. This funding is part of an overall package to enable candidates, regardless of their political background or persuasion, to stand for elections. The money will not cover all election costs; we are all aware of how expensive elections are. I cannot imagine that any candidate will not have to pay money to stand for election. There is always a risk involved.

I do not want the Minister to repeat herself. The points the Minister is making are reasonable but additional points need to be considered. If the Minister's amendment is inserted, I suggest that a further amendment to it be put down on Report Stage which would provide for where a candidate would come to an agreement with his agent on all or part of the funding being remitted to the agent. If a candidate made that agreement in advance of an election, that would be recognised as valid, legal and binding.

I put forward the amendment but I will have a look at that. There is a principle of equality to be adhered to here as laid down in the McKenna judgment.

I accept that.

The Minister persists in saying this amendment will enable people to stand for election on the understanding that they will achieve a quarter of the quota. One could argue that, if one is to pay money to enable people to stand for election and one wants to be fair, everybody should be funded. The Government has decided on this criteria in relation to candidates reaching a quarter of the quota, in order that we will not have to pay everybody who stands for election and the funding will not cost Irish taxpayers a fortune. Is it not quite legitimate to argue that, once the concept of paying this £5,000 is introduced and it is written into law that a quarter of the quota must be attained, somebody will ask why? Why should everybody not be allowed to contest the election and be paid the £5,000? If we are talking about equality, there must be equality for all, not just for those candidates who can reach a quarter of the quota. Will we land ourselves with all sorts of legal actions if people decide the Government is discriminating against them because they cannot satisfy the criteria laid down? A person might have a statement to make and feel he should be as entitled to make that statement as a candidate from any of the political parties. Are we not in danger of opening up a can of worms here?

The Minister has not even attempted to quote any legal opinion from the Attorney General or anybody else on this matter. I am not convinced there is an imperative to introduce a £5,000 grant for people contesting elections. I am convinced there is nothing in the McKenna judgment which indicates that. If this section is inserted, there will be a plethora of legal actions, by people who feel they should be treated equally in the coming months, which could possibly delay an election. The only way to ensure everybody is equally treated is to allow them to stand if they want to without paying them to do so. I am aware of the expense involved in an election campaign but I genuinely do not know of anybody who has been, or has felt, prohibited from standing for elections, Dáil or local, because of the expense involved. People on the dole have stood for elections, people who had no visible means of support yet still seemed to be able to find the money to do this and to have material published and so on. If a person strongly believes he has a message to get across to the electorate, I have no objection to him standing for election but none of us, political or non-political party members, should be paid to contest an election.

The advice I have is that the provision for reaching a quarter of a quota is a reasonable one. Deputy Dempsey makes the point that the funding should be available to everybody. Nobody is prevented from standing in elections. That is a principle which has been established. There must be some measure of control in this, otherwise the provision will be abused. All reasonable people accept that there must be limitations and certain criteria must be satisfied. This approach allows people to retain their deposits. The legal advice I have is that is an acceptable and reasonable position. At the end of the day reason prevails when it comes to legislation.

My experience is different to that of Deputy Dempsey who thinks people are not prevented from contesting elections because of monetary considerations. Women, in particular, feel limited and prevented from presenting themselves as candidates, often owing to the fact that they are not financially independent and are not in a position to avail of resources. One of the limiting factors, in trying to achieve a balance in representational politics, is that so many women are not financially independent. That is a reality and we should not pretend otherwise. I am not saying it is the sole reason. That is part of the nature of the representation of politics. People feel they are unable to participate in the way we can. This idea of supporting candidates based on the principles of quality is important and progressive and allows for all the difficulties political parties may have. It is a good principle but it must be applied equally across the board.

Amendment put.
The Select Committee divided: Tá, 12; Níl, 10.

Broughan, Thomas P.

McCormack, Pádraic.

Connaughton, Paul.

McManus, Liz.

Connor, John.

Mitchell, Jim.

Creed, Michael.

Penrose, William.

Flaherty, Mary.

Ring, Michael.

Kenny, Seán.

Ryan, Seán.

Níl

Ahern, Michael.

Ellis, John.

Ahern, Noel.

Foley, Denis.

Connolly, Ger.

Lenihan, Brian.

Cullen, Martin.

Sargent, Trevor.

Dempsey, Noel.

Wallace, Dan.

Amendment declared carried.
Question proposed: "That section 18 be deleted from the Bill", put and declared carried.
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