Thresholds
It is standard practice to impose a minimum requirement on parties and candidates wishing to receive public financing. The requirement may be in several different forms.
(a) A condition of financial aid to individual candidates may be that they should obtain a certain percentage of the votes cast in their districts in the election for which the subsidy is being sought. Since it will be unclear before the election whether each candidate will obtain the necessary threshold of support, it will then be necessary to reimburse money after the election to those candidates who qualify. This system has a disadvantage for candidates who are uncertain about whether their level of support is likely to meet the requirement for subsidies. Such candidates will therefore be under pressure to limit their outlays in case they do not receive a post-election reimbursement.
Alternatively, for routine grants to political parties, the threshold may be based on the results of the most recent general election.
(b) For a political party, the requirement for subsidy of campaign costs may be that it puts forward candidates in a certain number of seats.
(c) For subsidies for routine organisational costs or of campaign costs, parties may be required to win a certain number of seats in the legislature.
(d) The test may be a certain percentage of the national vote.
(e) There may be a combination of tests: a minimum percentage of the national vote and a minimum number of seats in the legislature.
Thresholds for public subventions vary between 0.5 percent of the national vote in Germany to 15 percent of the vote for individual candidates in Canada. It should be noted that, in countries where parties are required to achieve a threshold of electoral support to qualify for seats in the legislature, a different threshold might apply to public subsidies. For instance, in Germany, the basic threshold for seats in the Bundestag is 5 percent of the national vote; but for public subsidies, the qualifying hurdle is only 0. 5 percent.
As of 1995, thresholds of electoral support for public funding include the following. Some of the statistics refer to grants to national party organisations, others to candidates for various elective offices:
- Taiwan - 75 percent of the votes needed by each candidate to secure election
- Canada - 15 percent
- Turkey - 7 percent
- Italy - For Senate campaigns 5 percent of votes in the region, or 15 percent of all votes for independent candidates
- France - For National Assembly election 5 percent
- Greece - 3 to 6 percent
- Australia - 4 percent
- Sweden - 2.5 percent in last 2 elections
- Japan - 2 percent or over 5 candidates incumbent Diet members
- Mexico - 1.5 percent
- Israel - less than 1 percent
- Germany - 0.5 percent
The argument for a low threshold is fairness to emerging political parties. The arguments for higher thresholds are, first, that they deter frivolous parties and candidates such as Britain's 'Monster Raving Loony Party' which might otherwise create themselves for the specific purpose of gaining a chunk of public money. In addition, a high threshold may ensure that public funds do not need to be given to extremist parties which are likely to use the money to spread anti-democratic and (in many cases) radicalist doctrines.
However, the support in some countries for extremist parties is sufficiently large to make it impossible to set a threshold that will exclude them from a share of taxpayers' money without also excluding some significant, legitimate parties in the process. The possibility that public funding will promote non-democratic parties is an unfortunate but sometimes inevitable consequence of the introduction of state financial aid.
Formulas
In different countries, the distribution of public funds for parties or candidates is based on several criteria.
(a) The grant may be a proportion of actual expenditure where the receipt of public money is on condition that the party or candidate also raises money from private sources.
(b) The grant may be conditional upon the recipient's agreeing to forego the right to raise campaign money from private sources. (This is the rule for public funding of presidential election campaigns in the United States.)
(c) The grant to parties may be proportional to their votes in the previous general election.
(d) The grant may be proportional to each party's number of seats in the legislature.
(e) The grant may be proportional to each party's representation in the legislature but with the additional provision that parties supporting the government receive less per seat than opposition parties.
(f) The grant may be based on several criteria.
Examples
Canada
An example of the reimbursement of campaign costs is the Canadian system.
(a) Each candidate receives a reimbursement of 50 percent of campaign costs. Candidates must receive 15 percent of the vote in order to qualify and they must also adhere to a set spending limit.
(b) For campaign expenses of national party organisations, the reimbursement is 22.5 percent of the total. Again, there is a spending ceiling. National parties are not required to obtain a minimum percentage of the vote to qualify; instead, they are required, first, to spend at least 10 percent of the maximum permitted budget and, second, they must field at least 50 candidates.
Germany
An example of a formula for annual, routine subsidies to national party organisations is the German system.
(a) The public subsidy is computed on the basis of the latest election result. For the first 5 million votes, each party receives DM 1.30 per annum and DM 1 thereafter.
(b) In addition, DM 0.5 is granted for every DM 1 received by the party in membership dues.
(c) The direct subsidy must not exceed the amount raised by each party from membership subscriptions and other private sources.
(d) To qualify for matching funds, membership subscriptions must be no more than DM 6,000 per person per annum.
(e) The party must have obtained at least 0.5 percent of the vote in the last election (or 1 percent of the vote in a state election).
(f) According to an amendment of 1993 to the Parties Law, there is an absolute ceiling of DM 230 million a year on the total direct subsidy to all parties combined. 23
Nicaragua
For the 1990 elections, the Supreme Electoral Council was authorised to allocate a specific amount to political parties.
- Fifty percent of this was to be divided between them in equal amounts,
- the remainder on the basis of the number of votes received in the 1984 elections.
- Parties which did not contest the earlier ballot each received the same as the party with the fewest votes.
Draft Only
