Amendments to give parties share of extra £5m in State funding

The State's political parties would share an extra £5 million annually in State funding under two major Government proposals. The proposals are designed partially to compensate them for the loss of major corporate donations.

Publishing amendments to the Electoral (Amendment) Bill, the Minister for the Environment, Mr Dempsey, announced that donations to parties will be limited to £5,000 a year, and to a maximum of £2,000 for individual politicians.

Currently, State funding for political parties comes in two ways - funding for the party's central organisation and the party leader's allowance. The Department of the Environment pays £1,028,000 to the parties to run their central organisations. This figure will now jump to £3 million.

Of this sum, Fianna Fail should get approximately £1.5 million, while Fine Gael's sum should be little short of a £1 million. Labour should be entitled to £300,000, while the remainder will be shared between the other parties currently represented in the Dail.

In addition, the parliamentary party leaders' allowance, which depends on the number of TDs each party has and which now stands at £2,652,184, will go up to £4,580,429.

The Minister for the Environment also intends to pay an extra £100,000 to any party that manages to secure more than 2 per cent of the first-preference vote in the next general election, which will disproportionately benefit smaller parties.

In total, Fianna Fail should get 2.3 times more funding under the changes; Fine Gael and Labour should get nearly double the amount, while the Progressive Democrats should get nearly three times as much as before, a source said last night. The Greens will get approximately 2-1/2 times more than before, while Sinn Fein will get 3.3 times more.

In return for the leaders' allowances' increase, the party leaders will have to submit annual, independently-audited accounts to the Public Offices Commission, which already monitors many other aspects of political funding.

Under the Government's plan, foreign contributions to parties will be curbed, but not banned. In future, only Irish citizens living abroad will be able to make donations. Companies will have to have an office registered on the island of Ireland if they want to make a donation. This change could hurt Sinn Fein's fundraising in the US.