Phil Hogan (Carlow-Kilkenny, Fine Gael)

Article 63 of the Treaty on the Functioning of the European Union makes provision for the free movement of capital. The regulations governing political parties at European level do not distinguish between donations from natural or legal persons - both categories may give donations.

Has the party opposite given sufficient attention to the compatibility of its proposed amendment with these legal instruments? It would appear it has not done so because the proposed insertion does not make sense in the context of its intended placement in the Constitution. Aside from the wording of the amendment and other technical issues, it is reasonable to suggest the amendment is being made in the wrong place. International considerations are a factor but political donations are not about international relations.

As the Deputies opposite will be aware, an outright ban on corporate donations raises particular questions with reference to the provisions of Article 40 of the Constitution on freedom of expression and freedom of association. The proposed amendment would need to be balanced against these rights and it is not clear that the Fianna Fáil Party amendment would do this.

The Bill proposes that the restrictions would apply to "political donations to organisations or people involved in political campaigning". The terms "political donations" and "political campaigning" are not defined further. The terms used in the constitutional amendment are different from those used in the legislation that regulates political funding, namely, the Electoral Act 1997. We could end up with one set of terms and definitions used in the Constitution and another set used in legislation enacted by the Oireachtas. This would not be a desirable outcome. While I acknowledge that these are technical points, in proposing to amend the Constitution we must be precise about technical matters.

This amendment, as worded, could also have far-reaching consequences which may not have been considered. As framed, the constitutional amendment could reasonably be interpreted as including philanthropic contributions to charities or non-governmental organisations which engage in advocacy work. After all, advocacy work could be regarded as political campaigning. Many organisations that provide services for the marginalised also act as their voice. Such groups could face a stark choice and either be curtailed in providing services or silenced. Neither option is palatable. For example, the functioning of a group which provides services for people with disabilities while also promoting awareness of their needs could be restricted by this Bill. This refers not to the hidden hand of some large corporate donor seeking to influence politics but normal, acceptable activities in a democratic society. As presented, Ireland's public sphere of policy debate could be significantly diminished as a result of this constitutional amendment, which appears to say one thing but could end up doing something else.

In proposing a unilateral constitutional amendment it appears regard has not been had to other possible consequences that could arise. Currently there are mutually compatible systems for the regulation of political donations operating in both jurisdictions on the island. As a former Minister for Foreign Affairs, Deputy Martin should be well aware of these arrangements. A constitutional amendment would, therefore, have implications for North-South and east-west relations. The regulatory regime for donations to political parties in Northern Ireland allows donations by certain Irish citizens and bodies in accordance with the spirit of the Good Friday Agreement. The system in Northern Ireland, which differs from that applicable in Scotland, England and Wales, was the outcome of negotiations between the authorities in both jurisdictions.

Adjustment of the regime for political donations in this jurisdiction may have implications for the British system as it relates to donations from this State to Northern Ireland political parties. These issues are being examined in preparing the Government's Electoral (Amendment) (Political Funding) Bill 2011. Consideration of the impact of a constitutional amendment on the maintenance of the agreed approach to the regulation of political funding would be advisable before such an option is pursued.

In being critical of the proposed constitutional amendment before us, I also want to be constructive. In finding fault, it is also important to offer solutions. In a matter of weeks the Government will publish a Bill to reform and further regulate political funding. I will outline some of the main provisions of that Bill. I will return to these in greater detail when I will hopefully have an opportunity to speak further in this debate.

The Government Bill will restrict corporate donations to politicians and political parties through a system of registration of donors. It will significantly reduce the amounts that can be accepted as political donations and will significantly reduce the thresholds for declaring political donations. The Bill will require the submission by political parties of their annual accounts to the Standards in Public Office Commission for publication. As an incentive to encourage political parties to apply a more equal gender balance in the selection of candidates, State funding for political parties will be halved if they do not have at least 30% female and 30% male candidates at the next general election. This will rise to 40% after seven years.

I am serious about bringing about change to a political system badly in need of reform. The Electoral (Amendment) Bill 2011 was enacted on 25 July 2011, less than five months after the Government took office. As part of the agenda to make the political system leaner and more efficient for citizens, the terms of reference for the Constituency Commission have been changed by this Act to provide for a reduced number of Deputies. The Act also reduced the spending limits at presidential elections from €1.3 million to €750,000 and reduced the amount that candidates can be reimbursed for expenses from €260,000 to €200,000. These revised arrangements were in place for the presidential election. This signal of restraint in spending by those in public life is exactly the kind of thing that we need to do in these difficult times. The Act also provided that all Dáil by-elections are called within six months of a vacancy arising. As the recent holding of the Dublin West by-election demonstrates, we have shown our commitment to both the letter and spirit of this new law.

The party opposite set out its stall for reform with an incomplete and ineffective political donations Bill. That Bill is now accompanied by a constitutional amendment that in a generous interpretation needs further work, and from a less benign perspective could do more harm than good.

I do not take issue with much of what has been said so far. I want to reiterate that the potential exists for undue influence to arise, to the detriment of the wider public good, from the corporate funding of politics. In addition to the potential for actual corruption to exist, the perception that there is some form of mutually beneficial relationship in operation 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.

The Government approach in reforming political funding is more comprehensive, ambitious, and in a crucial test which the proposal before us today does not pass, it is an approach that will work. On behalf of the Government, therefore, I am opposing this Bill.

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