Political party war chests not geared to two campaigns in single year

Uncertainty over the formation of the next government raises a question as to whether the political parties could fund another election if it came to it. They probably could, but a second contest would still present a big financial challenge.

Elections simply drain cash from parties and candidates. Having spent lavishly before the poll on Friday, parties must now pay the bill. There is little by way of firm guidance in respect of their spending this month, but records from the 2011 election illustrate just how expensive it can be to run a campaign.

Statutory filings to the Standards in Public Offices Commission (Sipo), the national ethics watchdog, show that overall spending by parties and election agents came to €9.28 million. Fine Gael spent €3.12 million, Fianna Fáil spent €2.14 million, Labour spent €1.96 million, Sinn Féin spent €496,928 and Independents spent a total of €1.41 million. All that razzmatazz does not come cheaply.

Just as a family might set aside money for a summer holiday, party finances are generally structured to build up war chests for poll years apart, be they general, local or European elections. From a party funding perspective, therefore, the prospect of a second general election any time soon would be akin to a family leaving for a new holiday just as the credit card bill arrives from the last one.

Financial pressure is inevitable in this scenario, and was acknowledged by high-level sources in Fine Gael, Fianna Fáil and Labour. Take note that such pressure is all the greater for Independents. They cannot rely on funding from party headquarters, even in a situation where the party itself is constrained.

Contingency reserves

But that is not the entire story. For example, parties tend to hold money in reserve for political contingencies. They might not spend as freely in a second campaign, however. A media “air war” would be more likely than a ground offensive covering every street in the constituency.

Bigger parties particularly can borrow from banks on the likelihood of future State funding coming in. Moreover, there is nothing to stop tried and tested fundraising initiatives such as draws, collections and so forth.

Corporate donations remain an option, but this remains an opaque area. For one thing, there are strict legal limits on the amount that any candidate or party can receive from a single source in a year. While the practice these days is to seek many small donations below the official disclosure threshold, it is a given that any new corporate fundraising drive for another election could push donations above the disclosure limit.

State funding

There is more. The general election result determines where public funding goes in the political system. Thus parties that added to their vote and their tally of seats can expect to draw down more money from the State for the duration of the next Dáil.

This is to the benefit of smaller parties that made inroads in this election. For the Anti-Austerity Alliance/People Before Profit as well as the Social Democrats and Greens, the attainment of combined first preference support above 2 per cent qualifies them for a share of some €5.5 million in annual political funding under the Electoral Acts. This money was divided between Fine Gael, Fianna Fáil, Labour and Sinn Féin on the basis of the 2011 election result. Now it will be shared within a wider pool.

Pinning down the state of party finances is notoriously difficult, however, and even more so in the immediate aftermath of an expensive election campaign. Still, other Sipo demonstrate how much public money as at the disposal of parties.

Data for 2015 is not yet available in respect of the parliamentary activities allowance, formerly known as the party leaders’ allowance. But 2014 figures show parties received €7.11 million that year and had the benefit of €2.68 million in unspent money brought forward from 2013. Thus €9.8 million was available for 2014, and €2.78 million unspent that year was carried forward into 2015.

Again the scale of funding reflects Dáil and Seanad seats. Fine Gael received €2.55 million for 2014 and Labour received €1.69 million, allocations which will go down after a big loss of support on Friday.

Fianna Fáil received €1.59 million in 2014 and Sinn Féin got €1 million, allocations that will rise after they won seats. Anti-Austerity Alliance received €9,000 in 2014, the Socialist Party received €111,000 and People Before Profit Alliance received €136,000.

Such money cannot fund electoral activities, but its availability funds political activity such as policy formulation, and party administration frees up other funds for electioneering.

At the end of the day, parties might end up contesting a second election with something close to empty pockets.