Irish politicians’ gravy train intact despite escalating debt burden

The proposed €120 billion plan proposed at the two-day summit in Brussels last night is relatively modest when compared to the National Debt of Ireland, which nos stands at  €129 billion

While the Government wrestles with its conscience about the phenomenal debt burden on Irish taxpayers’ and the implications of the personal insolvency of many of them, one facet of that burden which seems utterly immune from the conscientious distress of the Government is the quantum of taxpayers’ money paid to political parties and Independent members of the Oireachtas under the Electoral Acts.

The sums involved are additional to the very substantial tax-free payments in respect of the Parliamentary Standard Allowance, the Travel and Accommodation Allowance and the other direct supports provided through the Oireachtas Commission at a cost of €130 million in 2011. They are simply outrageous, unconscionable and, in a society bearing a cumulative exchequer deficit well over €82 billion and a titanic National Debt, unaffordable.

The standard of accounting is risible in the case of political parties and non-existent in the case of Independent politicians. The quality of oversight reporting by the politically-compromised Standards in Public Office Commission is opaque, shoddy, wretched, inconsistent and disregarding of basic accounting conventions.

Thanks to the bountiful munificence of Charlie McCreevy in 2001 political parties have been granted over €78 million of taxpayers’ money since 1 January 2007 under the authority of the Electoral Acts to meet reported expenditure of under €64 million with €14 million left in their balance sheets. Last year 29% of the €13.3 million paid to political parties was carried over to 2012, probably as a consequence of the vast sums spent paying a myriad of ministerial political advisers.

The scale of these payments escalated since 2002 by 47% in line with increases in public sector pay but it is most noteworthy that payments to political parties did not reduce when public sector pay reduced from 2009 onwards.

Do taxpayers really need to: pay Fianna Fáil €28,542 in respect of depreciation, (a non-cash charge); pay Fine Gael €18,657 to spend on ‘donations’; pay the Labour Party €44,000 to spend on ‘international affairs’; provide €28,700 to the Sinn Féin ‘national finance department’ and leave €90,000 in the balance sheet of The Green Party, which has no Oireachtas membership? [/over]

Fine Gael and Labour voted against the appointment of a politician (former Fianna Fáil minister, Michael Smith) in a Dáil vote on 19 December 2007 to membership of the Standards Commission, a curtain-raiser initiative of the Ahern Government that preceded the publication of tribunal reports. It is interesting that only 15 of the 73 TDs who supported that motion are in the current Dáil and they include the Chairman of the Public Accounts Committee, John McGuinness, Independent Deputies Noel Grealish, Finian McGrath, Mattie McGrath and Michael Lowry.

Both the Taoiseach, Enda Kenny and the Tánaiste, Eamon Gilmore,  participated in the Níl vote against that motion. If the Governing parties position in 2007 opposed the principle of a politician, or former politician, becoming a member of a commission whose mandate is to oversee the ethical standards of politicians and public officials’, why has this Government not already removed political influence from the Standards Commission, especially in the light of the tribunal reports’ findings and instructed it to improve the quality of its published reports rather than tolerating its interminable excuses for inertia and weakening moral authority?

Will the Government’s ambition to reduce the debt burden on taxpayers’ include a dramatic reduction in the amounts of State money paid to political parties to a level that is affordable and demand a more transparent and credible regime of accounting for this money, or does the Government merely intend to haunt society with threats, innuendo and rumours of more taxation, new charges and cuts in public services?

Political party State funding, a rich, rewarding gravy train

The scale of funding provided by taxpayers to political parties under the Electoral Acts and the Party Leader’s Allowance legislation, by any benchmark, is so outrageous, absurd, unaffordable and inadequately accounted for that political parties have become equivalent to bloated, featherbedded and State-dependent QUANGOs.

Figures recently published show that taxpayers provided €12.66 million last year to which a further €3.1 million was carried forward from 2010 bringing their spending capacity in 2011, courtesy of taxpayers’, to €15.77 million. They reported spending €11.88 million which means they brought forward €3.8 million to 2012; a 26% increase on the sum carried forward, unspent, from 2010, in an era of severe austerity, great personal sacrifice and massive cutbacks.
 
To put the scale in context, the British Government provided €8 million in 2011 to Opposition parties who successfully contested the 2010 general election for research support for front-bench spokesmen. The 2010 British general election consisted of a valid poll of 27.1 million votes. Our 2011 general election consisted of 2.2 million 1^st preference votes.

Despite the attachment of an auditor’s certificate the accounting for this money is pathetically obscure; devoid of candour and adequate transparency, notwithstanding the proximity of the Standards in Public Office Commission as overseer.

The Standards Commission advise that Fianna Fáil, for example, claimed to spend €28,542 on ‘depreciation’, a non-cash expense. Fine Gael spent €18,657 on ‘donations’. Labour spent €44,666 on ‘international affairs’. Sinn Féin spent €28,700 on its ‘national finance department’. The Green Party, with only 41,000 general election votes and without a single Oireachtas member, managed to spend €341,466 but have still brought forward over €90,000 to 2012. The pair of two-TD parties received so much funding that they are bringing forward almost €93,000 of unspent taxpayers’ money to 2012 leaving the four of them to eke out an existence on the €167,462 in tax-free travel, subsistence and Parliamentary Standard Allowances.

The People Before Profit Alliance spent just €1,000 on ‘pre-Budget research’ but over €7,500 on ‘travel and subsistence’, over and above the €20,000 their TDs collected in travel and subsistence to commute from the adjacent Dublin suburbs last year. The Socialist Party has obliged all taxpayers to pay €4,689 in respect of the production of Socialist Party publications. Independent members [/over] of the Oireachtas pocketed €713,885, free of income tax, without even an auditor’s certificate, or any obligation whatsoever to account for this money. Some of them tell us they donate their allowances to charity.

The Parliamentary Leader’s Allowance, which last year amounted to €7.2 million, is linked to pay increases in the civil service but the legislation does not compel a reduction in line with civil service pay cuts and the radical pruning of the public sector since 2009.

It is noteworthy, in the context of the statutory mandate that 30% of selected candidates in the next general election are to be female, that 1.4% of the €5.4 million provided to seven parties under the Electoral Acts was applied to the promotion of participation of women in political activity.

The foregoing expenditure is separate and distinct from the €6 million received, tax-free, directly by TDs in respect of the Parliamentary Standard Allowance and generous tax-free travel and subsistence allowances, which they receive when they turn up for the 100 days sitting of the Dáil each annum.

Spending last year on political parties is equivalent to an average of €1,311 for each 200 votes received by qualifying parties in the February 2011 general election. Political parties in Great Britain and the North are obliged to provide detailed annual audited accounts since 2003. The average overall subvention for each set of 200 votes won by qualifying parties in the last British general election in 2011 was €37.16, less than 3% of what Irish taxpayers are saddled with.

The ridiculous scale of political party spending in Ireland is also illustrated when the campaign cost of each vote cast, €4.17 in the 2011 general election is compared to the campaign cost of each vote cast in the 2010 British general election, €1.07.

Is there any other facet of the €52 billion in current expenditure that is spent by the Government so out of kilter with economic reality, where loose and ambiguous rules are tolerated and the standard of elementary accountability to stakeholders is so opaque?

How can the Irish Government, reform-minded and responsible for public expenditure, public sector reform and the adequacy of corporate governance standards look voters in the eye while this self-indulgent squandering orgy that is unnecessary and which is taking place directly under their collective nose?

The British political party subvention, incidentally, is restricted to Opposition parties with at least 2 MPs and more than 150,000 votes (0.55% of the national poll). It is based on three elements:

1. General funding of €18,600 per seat + €30,04 for every 200 votes

2. Apportioned travel expenses for Opposition parties subject to an overall limit of €204,000

3. A sum for the running of the Leader of the Opposition’s office

4. Salaries for three post holders: Leader of the Opposition’ Opposition Chief Whip and Assistant Opposition Whip

Greater transparency urgently needed in Ireland after Mahon Tribunal findings

The publication of The Mahon Tribunal findings highlighted the urgent need to make the political system in Ireland more honest, more transparent and more accountable.

The passage of the Electoral (Amendment)(Political Funding) Bill 2011 will reduce the threshold for reporting donations to political parties and politicians. The maximum amount of political donations which can be accepted, in the case of a political party, will be reduced from €6,348 to €2,500 and in the case of an elected politician from €2,539 to €1,000. A political party will be required to report donations to the Standards in Public Office Commission of €1,500, or more while a candidate for political office will be required to report all donations above €600.

Companies, trade unions, societies and building societies will have to report all donations over €200 in their annual reports, having previously only been obliged to report donations above €5,078.

This reform is to be followed by a Government commitment to introducing a statutory register of lobbyists this year and to establish rules governing the practice of lobbying and representations on this matter have been received from a number of interested parties.

The underlying intention of this is to make politics more transparent; to make the political enterprise more accessible to everyone. The positive contribution that lobbyists make is acknowledged – by putting forward the views of vested interests to policy makers leading to better legislation.

The British Government also intend to regulate lobbyists. They suggest that a lobbying firm would have to register quarterly with details for public inspection of the registered address of the company and its registration number; the number its employees on lobbying activity; whether those employees are former minister or senior civil servants and their client lists.

A self-employed lobbyist would be obliged to provide on quarterly details of clients.

At the heart of this would be the definition of a lobbyist. The voluntary register of lobbyists maintained by the UK Public Affairs Council defines lobbying, as activity in a professional capacity, that attempts to influence, or advise the British Government, Parliament, devolved legislatures or administrations, regional or local government, or other public bodies on any matter within their competence with respect to legislation or proposals for legislation; the formulation, modification or adoption of a rule, regulation or any other programme, policy or position; or the negotiation, award or administration of a public contract, grant, loan, permit or licence.

The British Government consider the foregoing definition unsatisfactory because the concept of attempting to influence is extremely broad and that it can be difficult to prove intention underlying action. A very broad definition can also have unintended consequences. Would too broad a definition of a lobbyists, for example, oblige lawyers advising lobbyists on employment law, or a building design expert helping a campaigning organisation to reduce energy consumption to register as a lobbyist?

Ireland could learn from the approach to lobbying elsewhere.

European Union

A voluntary joint European Parliament and Commission Transparency Register was launched last June in order to register and monitor ‘organisations and self-employed persons engaged in EU policy making and policy implementation’.

The scope of this covers all activities carried out with the objective of directly, or indirectly influencing the formulation or implementation of policy and the decision-making processes of the EU institutions, irrespective of the channel or method of communication used. The scope excludes legal advice and the activities of social partners acting in an official designated capacity under a specific Treaty. Churches, religious communities, political parties, local, regional and municipal authorities are also excluded but any representative office or legal entities, offices and networks created to represent them are expected to register.

Networks which have no legal status or legal personality but which constitute a source of organised influence and which are engaged in activities falling within the scope of the register are expected to register.

Registration is free but conditional on signing up to a code of conduct that requires transparency over who lobbyists are, who they represent and their aims and objectives.

Information must be updated at least annually in addition to indicating the areas of policy in which they have an interest. Professional consultancies are expected to disclose their turnover that results from activities that fall within the scope of the register. They must list their clients in decreasing order of contract value. Trade and professional associations are expected to provide an estimate of the cost associated with their activities associated with the activities falling within the scope of the register. And to publish tier overall budget and sources of funding, including disclosure of funding from other EU instritutions.

United States

American legislation defines a lobbyist as any individual compensated by a client for services that include more than one lobbying contract – that is, more than one communication where there is an attempt to influence – except where lobbying activities constitute less than 20% of their time over a 3-month period. A client is defined as any person or entity who employs and compensates another person to conduct lobbying activities on their behalf. Groups that carry out lobbying activities on their own behalf must also register.

A lobbyist whose lobbying expenses exceed, or are expected to exceed a $3,000 threshold over a 3-month period is required to register once he or she has had a lobbying contact with senior members of the legislative or executive branch of the US Federal Government, or with senior officials.

Lobbyists in the US are required to file quarterly reports of their activities and identifying the name of the firm or entity; the number employed in lobbying and the entities and issues which are lobbied.

Canada

There has been lobbying legislation in place since 1989 which was revised in 2008. Activities covering more than 20% of time lobbying are captured. Exceptions include communications restricted to requests for information already in the public domain and the preparation and presentation of material to parliamentary committees.

Australia

Lobbying in Australia has been regulated since 1983 with a separate register for foreign and local lobbyists. Lobbyists were obliged to register when they took on a client and to provide a description of the pertinent lobbying activity. A lobbyist required a letter from the Registrar before approaching a minister or officials about the issue which concerned the lobbying.

Government representatives are not allowed, since 2008, to knowingly engage in lobbying activities with unregistered individuals.

Lobbying activities in Australia mean communications with a government representative in an effort to influence government decision making, or amendment of legislation, the development or amendment of a government policy or programme; the awarding of a contract or grant or the allocation of funding.

But it does not include communication with a parliamentary committee or the communication with a minister or parliamentary secretary with respect to non-ministerial matters. It does not include communication with respect to calls for submissions, petitions, or grass roots campaigns with respect to changing a policy or decision. It does not include communications in response to a request for a tender; statements made in a public forum or responses to government to requests for information.

A lobbyist in Australia does not include a charitable, religious or other organisation or funds that are endorsed as a deductible gift recipient; non-profit organisations or associations constituted to represent the interests of their members that are not endorsed as deductible gift recipients; individuals making representations on behalf of relatives or friends about their affairs; foreign trade delegations visiting Australia; professional whose everyday work involves dealing with government representatives in a professional capacity (e.g. an auditor or broker); or members of professions, such as doctors, lawyers, accountants or service providers who make occasional representations to government on behalf of others in a way that is incidental to the provision of that particular service