Willie Penrose (Longford-Westmeath, Labour)

At the outset, I acknowledge that the Bill contains some good and welcome proposals and I would not take issue with a number of the points made by Deputy Ó Cuív. However, in many respects the Bill is too limited and narrowly focused. It also contains a number of flaws that would make some of its intended provisions unworkable. The Government has a more ambitious programme for the reform of political funding arrangements and we will, therefore, be opposing this Bill.

I am somewhat surprised by the speed at which this Bill has been brought forward. Notwithstanding what Deputy Ó Cuív said, there was ample opportunity for the previous Administration not only to publish a Bill, as Fianna Fáil has now done, but to have it enacted and implemented. Clearly, this did not happen during the lifetime of the previous Administration.

However, rather than focusing on what should have been, I want to talk about what is going to be. I want to deal specifically with what the Government will do to radically overhaul politics and Government work. Our plans for reform are set out in the programme for Government, which we are already implementing.

Provision is made in the Government's legislation programme for the current Dáil term for the publication of an electoral (amendment) (political funding) Bill. This Bill will amend the Electoral Acts so as to implement political funding commitments set out in the programme for Government. Work is currently under way on its preparation and I expect draft legislation will be published in a matter of weeks.

On matters related to the reform of the funding and operation of politics, the programme for Government makes the following commitments. We will introduce spending limits for all elections, including presidential elections and constitutional referendums, including for a period in advance of scheduled local, European, general and presidential elections. We will significantly reduce the limits on political donations to political parties and candidates to €2,500 and €1,000, respectively, and require disclosure of all aggregate sums above €1,500 and €600, respectively. We will introduce the necessary legal and constitutional provisions to ban corporate donations to political parties. Our open government legislation will also establish an electoral commission to subsume functions of existing bodies and the Department of the Environment, Community and Local Government. Public funding for political parties will be tied to the level of participation by women as candidates achieved by those parties.

The Government is serious about changing the way politics is conducted. Although we have been in office for just over two months, tangible actions have already been taken. Last week, my colleague, the Minister for the Environment, Community and Local Government, Deputy Phil Hogan, announced decisions taken by Government to deliver real and tangible political reforms in regard to other commitments outlined in the programme for Government. These decisions include changing the terms of reference of the constituency commission to facilitate a reduction in the number of TDs. A constituency commission is due to be established upon the publication of the 2011 census preliminary results, which are due in June. That commission will report within three months of the publication of final census results in 2012.

It also includes the reduction of the presidential election spending limit from €1.3 million to €750,000 and a reduction in the amount that candidates can be reimbursed for expenses from €260,000 to €200,000. This demonstrates the Government's commitment to show restraint in all aspects of spending involving public life and our belief that we need to start at the very top. In all walks of life, we have to do more with less, and that applies to political parties and politicians as much, if not more, than anyone else.

The Government has also decided that Dáil by-elections should be held within six months of a vacancy occurring. Democracy and the holding of elections are a right. They should not be regarded as an inconvenience to be avoided and it should not be in the gift of the Government of the day to decide if and when by-elections are held. Separate legislation is currently being prepared to give effect to these changes, which follow other reforms already introduced by the Government including the removal of the automatic entitlement to ministerial cars and drivers, the cutting of the pay of the Taoiseach, Ministers and Ministers of State, and the removal of severance pay for Ministers. We are a Government in a hurry and we have a lot to do. However, we also want to do things right and to implement legislation that will work.

I will now address some of the measures contained in the Bill. Provision is made to place restrictions on corporate donations from companies, trade unions, societies and building societies. However, there are a number of other corporate structures that have not been included. For example, no provision is made for donations made by partnerships, unincorporated bodies, trusts, sole traders and non-governmental organisations. As it stands, the Bill before us would allow a number of corporate-type bodies to continue to give political donations, while restricting others. In its present form, the Bill would not work in practice as it does not address all donors who are not individuals.

The Bill provides for a reduction in the level of donations that may be accepted by political parties from €6,348 to €2,500, and by candidates and elected members from €2,539 to €1,000. The Bill provides for the level at which donations must be declared to be reduced from €5,078 to €1,000 for political parties and from €654 to €500 for candidates and elected members.

The provisions contained within the Fianna Fáil Bill represent a change from what was being proposed by that party during the recent general election, with greater reductions now being advocated. In fact, three separate positions have been adopted by the party opposite since the beginning of this year. There was the position taken when in government, then the position taken during the general election campaign and, now, the position has been modified again in the Bill before us. Each change of policy has been an advance on the previous position, and it would be churlish not to welcome this. However, I am of the view that the programme for Government and our own plans for legislative change on political funding are more comprehensive, better thought through and will be more effective in providing the improvements that the people of Ireland want to see.

The Bill before us would require the publication of donation statements within 25 days of polling by unsuccessful candidates and by 31 March of the following year for successful candidates. This change purports to address a recommendation in the Moriarty tribunal report for information on donations to be made available in real time. However, the measure put forward would not appear to provide any demonstrable improvement on current arrangements.

The Fianna Fáil Bill provides that the Standards in Public Office Commission would audit the accounts of political parties each year, with the income and expenditure account, balance sheet and donations statement being published. This provision does not appear to have sufficient regard to existing arrangements that are in place for reporting by political parties to the Standards in Public Office Commission. Currently, political parties are required to submit audited financial statements in respect of State funding received under the Electoral Acts and through the party leader's allowance. On the one hand, we would still have parties continuing to prepare these audited statements that the Standards in Public Office Commission would examine, while on the other hand the Standards in Public Office Commission would also be carrying out a further separate audit. I am not dismissing the proposal put forward, but clearly we need to avoid duplication and overlap and we need to target the resources of the Standards in Public Office Commission in the most efficient and effective manner possible.

Fianna Fáil has stated it will extend the supervision of the Standards in Public Office Commission to independent expenditures in referendums. The Government agrees that change is needed in the regulation of spending and donations at referendums, as outlined by Deputy Ó Cuív. Particular problems have previously been identified in regard to the regulation of spending and the sources of income of groups campaigning at referendums. I refer in particular to a report prepared in March 2009 by the Standards in Public Office Commission on the operation of provisions applying to third parties at the first referendum on the Lisbon treaty in 2008. Third parties are typically campaign groups and are defined under section 22(2)(aa) of the Electoral Act 1997 as a person other than a registered political party or a candidate at an election which accepts a donation exceeding €126.97 in value.

Referendum campaigns involve decisions on matters that have significant and far-reaching implications for the country. It is important that citizens know how much money is being spent by campaign groups and from where they get their money. However, the actual provision in the Fianna Fáil Bill amounted to a relatively minor amendment in the definition of what constitutes a third party, and a referendum would appear to be wholly insufficient to achieve anything of substance. It will take much more than inserting a few lines into the Electoral Acts to bring about effective reform in this area.

The explanatory memorandum published with the Bill states that it seeks to apply equivalent obligations in regard to financial transparency to Independent or non-party candidates as apply to political parties. It is doubtful whether the measures in the Bill would have this effect. The provisions in the relevant section of the Bill appear to relate more to third parties than Independent candidates. In short, although the stated intention of the Fianna Fáil legislation in this area appears to be clear, the measures to achieve the policy objectives do not appear to match up. The same point can be made, specifically in regard to this measure, but also more generally in regard to the Bill as a whole.

In making these observations and criticisms of the Bill, I acknowledge the work done in its introduction and acknowledge the understanding on the part of Fianna Fáil that more needs to be done to the Bill in any event to amend it and make it workable in practice. The press release issued by Fianna Fáil when it published this Bill on 11 April states: "We believe that the Government should support this Bill and allow it to go forward to Committee where amendments can be made". However, this Bill is too incomplete and not sufficiently comprehensive and for that reason the Government cannot support it.

An important context for the Government in the introduction of its legislation to reform political funding is the recent report on the tribunal into payments to politicians and related matters, more commonly referred to as the Moriarty tribunal report. The private Members' Bill before the House purports to address recommendations made in the tribunal report albeit in a relatively limited and selective manner that lacks co-ordination. It is important to re-cap on what is actually in the Moriarty tribunal report. In line with its terms of reference, the tribunal put forward observations on the subject of political funding and its report makes 12 specific recommendations in this area. In paragraph 62.07 it is acknowledged that considerable advances have been made in the governance of political donations since the matters into which the tribunal has inquired arose. The report mentions the Electoral Act 1997 introduced by the Fine Gael, Labour and Democratic Left Government, the Electoral (Amendment) Act 2001 and the legislation which established the Standards in Public Office Commission but under current regulations the large-scale donations that were the subject of the tribunal's inquiries could not now be accepted. The maximum donation that can now accepted by a political party is €6,348, while the maximum that can be accepted by a politician or candidate is €2,539. The programme for Government commits to reducing these amounts to €2,500 and €1,000 respectively.

The Moriarty tribunal recommendations represent a substantial contribution to consideration of policy in this area. They are made in a report that lays bare the failings in the system that existed at the time. Although rules and regulations have been changed since the 1990s, some of the failings identified still prevail. The potential continues to exist for undue influence to arise from the corporate funding of politics, to the detriment of the wider public good. In addition to the potential for corruption, the perception that there is some form of mutually beneficial relationship between politics and business can have a corrosive impact on public trust. This is based on the view that the corporate funding of politics contributes to a public belief that those who pay can exert inappropriate influence in the formation of policy.

Therefore, the recommendations in the tribunal report are timely, as the Government is embarking on a major programme of legislative reform to improve governance and Government. Every recommendation is being considered in the preparation of this legislation. The programme for Government already commits to making radical changes to how politics is funded and operated here. On the most crucial issue in this area, the programme for Government goes beyond what the Moriarty report was in a position to recommend. The report states:

It may be observed in passing that, ultimately, the only cast iron guarantee against corruption and abuses in the political system, and against the risk of distortions in the democratic process that may arise from the private funding of political parties and political representatives, would be to provide for a complete ban on private funding and, as in some other European countries, to fund political parties entirely from the public purse.

The desirability and feasibility of such a general ban, having regard also to any constitutional law issues that might arise and to the national financial exigencies, is pre-eminently a matter for the Oireachtas and for public debate and consideration, and falls outside the remit of this Tribunal, whose focus under its terms of reference is on political funding from undisclosed sources.

The programme for Government contains a commitment to address corporate donations, to substantially reduce the level of donations that can be accepted and to reduce significantly the level at which donations must be disclosed. It may also be noted that the recommendations and views put forward in the tribunal report have some similarity with recommendations made by other bodies.

Ireland is a member of the Council of Europe Group of States Against Corruption, GRECO. In 2009, this body undertook an evaluation study of Ireland's political system, specifically examining the issue of party funding. Among the recommendations made was that all registered political parties should prepare independently audited accounts that would be made public in a timely and accessible way. It also recommended that consideration be given to lowering the current disclosure threshold for political donations. This report recommended the extension of the election spending control period, pointing out that expenditure outside of this period is not disclosed. Stronger investigative powers for the Standards in Public Office Commission are also advocated. Similar recommendations have been made by the Standards in Public Office Commission. Over the years, the commission has raised a number of concerns about the effectiveness of certain aspects of political funding legislation and has put forward specific recommendations for change. The commission's 2009 annual report, published in July 2010, is a case in point. Chapter Three of the report deals with the commission's responsibilities under the Electoral Acts. The report notes on page 32, that,"while the current system of regulation of political funding has some strong features, there are other fundamental measures which are yet to be developed". The same annual report also summarises the most significant proposals from previous reports of the commission in an appendix, along with updates on any progress which may have taken place in the meantime.

It is clear from the extensive and detailed range of recommendations made by the Council of Europe Group of States Against Corruption, the Standards in Public Office Commission and, more recently, the Moriarty tribunal, that there is no shortage of analysis on the shortcomings in Ireland's arrangements for the funding of politics. The one thing that has been lacking is a willingness to act. That may have been the case before but is so no longer.

The Moriarty tribunal was set up at a time when politics and political parties were predominantly funded from private sources. It is important to acknowledge the extent to which the taxpayers and citizens have taken on much of this burden in the interim. Considerable State resources are now committed to supporting the operation of our political system. There are three direct sources of public funding. Qualifying political parties can receive funding under section 18(1) of the Electoral Act 1997, whose provisions were introduced in 2001. To qualify, a political party must be included on the register of political parties and must have obtained at least 2% of the first preference vote at the preceding Dáil general election. Based on the most recently available information, the total funding dispersed through this source in 2009 was €5,438,385. This funding is used for the general conduct and management of a party's affairs, and cannot be used for electoral purposes. Each qualifying political party must submit an annual statement of expenditure of this funding and an auditor's report to the Standards in Public Office Commission.

The party leaders' allowance provides for the payment of an annual allowance to the parliamentary leaders of a qualified political party in respect of expenses arising from the parliamentary activities of their party, including research. To qualify, a party must have at least one member in the Dáil or Seanad. An allowance is paid to the party leader in respect of each member of the Dáil and Seanad. The combined total received by all party leaders through this source in 2009 was €8,164,879. Provision for these payments is made in the Oireachtas Ministerial and Parliamentary Offices (Amendment) Act 2001. Each party leader must submit an annual statement of expenditure of this funding and an auditor's report to the Standards in Public Office Commission.

The Electoral Act 1997 provides for the reimbursement of election expenses to qualifying candidates who achieve one quarter of the quota at a Dáil, European Parliament or presidential election. The maximum amounts that can be reimbursed to a candidate are €8,700 for a Dáil election and €38,092 for a European election.

In the 2007 Dáil general election, some 304 candidates qualified for reimbursement payments and this amounted to €2,368,013 in total. In the 2009 European Parliament elections, a total of 26 candidates qualified for reimbursement payments and amounted to €981,860 in total. Up to now the maximum reimbursement in a presidential election was €260,000. This is to be reduced to €200,000 for the 2011 presidential election.

Apart from direct sources of funding there are indirect supports. Candidates at a Dáil, European or presidential election are entitled to send one item of post free of charge to each elector. The total cost of this provision in the 2009 European elections was €10,980,518, which was paid from the Exchequer to An Post. There were further costs totalling €540,669 in respect of the two Dáil by-elections held on the same day. The estimated cost of the facility for the 2011 Dáil general election is €8.4 million. Other indirect supports include free air time for party political broadcasts.

The State pays for much of the administrative apparatus of political parties through the funding mechanisms I have described. When discussing legislation to reform the funding of politics, we are predominantly discussing how parties and candidates fund their election campaigns and contributions made to pay for the running of election campaigns. This is why it is so important that political funding is more open and transparent with regulatory measures in which the people can have confidence.

The Moriarty tribunal recommendations that I have already described in some detail have as their main focus the funding of politics and political parties. This was in line with the tribunal's terms of reference.

Another crucial aspect in the funding of politics forms part of the Government's plans. This was referred to already by Deputy Ó Cuív and concerns spending at elections and referendums. The programme for Government contains a commitment to have spending limits for all elections and constitutional referendums, including for a period in advance of scheduled local, European, general and presidential elections. Given the proximity of the presidential election, the Government has moved to reduce the spending limit from €1.3 million to €750,000. The legislation for this is being prepared. Spending limits apply at Dáil, European Parliament, local authority and presidential elections. At each election a candidate must submit a statement of election expenses and statutory declaration and must stay within the spending limits or potentially face prosecution. However, as I have already noted, no equivalent spending limit applies at a constitutional referendum or a requirement to submit a declaration of expenditure by those involved in a referendum campaign.

At the moment the spending limits in force apply only to the period immediately leading up to an election. At the recent general election, the spending period commenced on the date of dissolution of the Dáil, which was 1 February 2011. The election was held on 25 February 2011, candidates had to declare their election spending during that 25-day period and it had to be under the legal spending limit. Ordinarily, spending on election materials used before 1 February would not count when calculating a candidate's election spending. A similar provision applies in respect of elections to the European Parliament in which the spending period commences on the date the order appointing polling day is made. A spending period of 38 days applied at the 2009 European elections. At local elections a spending period of between 50 and 60 days applies.

Concerns have been expressed that spending by candidates and parties before the election period is not captured under the current arrangements. I noted earlier that this point has been raised by the Council of Europe's Group of States Against Corruption. The Standards in Public Office Commission has also highlighted this as an issue which should be addressed, as has the Office for Democratic Institutions and Human Rights of the Organization for Security and Co-operation in Europe in an election-monitoring visit to Ireland in 2007. As the commitments contained in the programme for Government make clear, the current arrangements that apply to spending at elections and referendums must be improved and we are committed to this.

I have outlined some of the key decisions on political reform that the Government has already taken. The Electoral (Amendment) (Political Donations) Bill is being drafted for implementation during the current Dáil session. There will be no delay or foot-dragging. As the Government's legislation programme states, the Bill will "amend the terms of reference for a constituency commission to provide for a report on Dáil constituencies to be made based on a reduced number of TDs in Dáil Éireann". It will also reduce the spending limits for presidential elections and legislate for the holding of Dáil by-elections within six months. Separately, the Electoral (Amendment) (Political Funding) Bill 2011 is to be published during the current Dáil session. As I have noted, the Bill will amend the Electoral Acts to implement political funding commitments set out in the programme for Government. The electoral commission Bill is also on the Government's legislation programme and is to be enacted during the lifetime of this Dáil.

The programme for Government contains a commitment to establish an electoral commission to subsume functions of existing bodies and the Department of the Environment, Community and Local Government. This is another part of the Government's wider commitment to a radical overhaul of the way Irish politics and government work. An electoral commission will be an important element in a reformed and revitalised electoral system. In developing proposals for the establishment of an electoral commission, the Government is aware that there is extensive knowledge and expertise in electoral matters on all sides of the House. The Joint Oireachtas Committee on the Constitution, which published a report on the electoral system in July 2010, stated that it strongly supported the establishment of an independent electoral commission. Those of us on this side of the House look forward to the continued input of Members in the implementation of the programme for Government commitment to establish such a body. It is noteworthy that during the recent general election campaign all the major political parties put forward policy proposals to set up an electoral commission. While there is broad agreement on the principle that an electoral commission should be established, setting up this new structure will be a major body of work and it needs to be done right. Issues for consideration include international best practice, the commission's structure and functions, to whom it should report, its relationship with other bodies currently involved in electoral administration and the approach to be followed in respect of the extensive legislation that will be required.

In addition to determining what areas of responsibility the electoral commission will have, we must consider practical matters such as its operational structure, staffing arrangements, budget, reporting arrangements and performance indicators. We have no wish to end up duplicating tasks currently performed elsewhere. The new electoral commission will have to be effective in the performance of its tasks and must be cost efficient. It should improve accountability and enhance the efficiency of elections. My colleague, the Minister for the Environment, Community and Local Government is giving consideration to how the necessary measures to establish an electoral commission can be advanced.

The Fianna Fáil Private Members' Bill is a useful contribution to the national debate taking place on the role of politics and how it is supported and funded. It would appear to address some of recommendations of the Moriarty tribunal, albeit in a relatively uncoordinated fashion. Similar provisions to those contained in the programme for Government have been included, especially in respect of reducing the donation limits and the thresholds for their declaration. The provisions for dealing with third parties at referendums are relatively limited and in their present form are unlikely to have a significant positive effect.

The principal measure in the Bill dealing with restricting corporate donations also appears not to have been fully thought through. Loopholes would allow a several corporate-type bodies to continue to make political donations. Overall, the Bill lacks vision, credibility and detail. In many ways, this sums up the difference of approach between the Government and the political party opposite.

The Government's proposed approach is a good deal more comprehensive and considered. It offers a joined-up approach to reform and addresses the following - how our political institutions work, or, in many cases, how they do not work to their full potential; political funding and election spending; and the reform of electoral administration. In bringing forward draft legislation on political funding, which we intend to publish shortly, we will also have regard to recommendations made by other individuals and bodies, including the recommendations made in the Moriarty tribunal report. Our legislation will match the expectations of the people for action with legislation and policy measures that will work. It will make the system more open and transparent for the voter. Accordingly, on behalf of the Government I oppose the Bill.

See this speech in context