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Tuesday 28.01.2020 | Name days: Spodris, Kārlis

Funding for parties: is state pocket money enough for Latvian parties?

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUTogether with the plan for Latvia’s budget for 2020 the idea to increase state funding for political parties next years has caused blood to boil in the veins of many residents. Especially because budget formation this year was accompanied by the phrase «No money!» – no money for doctors, no money for teachers, no money for anyone. Will changes to the law help parties «drop their addiction to sponsors» or will they only increase «pocket change» from the state budget?

Distrust of politics

It would seem the quickest way to lose friends in Latvia is joining a political party. Soon enough, friends, acquaintances and even family members voice their honest opinions about such a person’s personality, work ethic and lacking trustworthiness.

The low indexes of society’s involvement in politics and equally low trust towards parties, the parliament and government paints a picture that Latvian residents are confident – nothing good can come from political parties and people only join them to secure benefits for themselves, not society.

Because of that it is no surprise your average Latvian citizen is not particularly eager to join political parties and pay membership fees voluntarily and support their and the country’s values. Judging by this situation, the belief of Latvian residents is roughly the follows – only wealthy people join political parties to pave the way for their personal interests. It should be no surprise there are parties associated with very specific and powerful groups, such as insolvency administrators and «local rulers».

Changes to the Law on Funding of Political Parties have good intentions – of residents will not pay for democracy, the state will do that instead.

Corruption and «pocket money» for parties

The main reason behind development of amendments is the desire to reduce parties’ addiction to private sponsors.

Political parties started receiving funding in Latvia relatively recently – in 2009. Critics of amendments do not have to dig deep for arguments – it is enough to look at developments of the last couple of years. The construction cartel scandal, which involved prominent political, was well known to then the Prime Minister Māris Kučinskis. There were also countless scandals that were revealed at Riga City Council.

It would be enough for critics to say that state funding does not make parties reject money from sponsors and become more honest in attraction of money. There is no reason to mention public groups that have called for additional funds for a long time.

Currently every party that had overcome the 2% barrier in Saeima elections receive from the state EUR 0.71 per received vote. This means that after the most recent elections in Latvia, the most popular party – Harmony – is paid EUR 118 653 a year. New Unity receives EUR 40 114 and Latvian Association of Regions, which did not make it to the Saeima, receives EUR 24 862.

Other ways parties are allowed to acquire income – business operations, membership fees, and donations from private persons. The latter is not allowed to exceed EUR 21 500 from a single person.

This means that with a good number of «good uncles» with thick wallets, the current size of state funding may be considered as though «pocket change». Data from Corruption Prevention and Combating Bureau (KNAB) shows – donations to parties considerably exceed amounts the state provides. On top of that, these amounts paid to parties during Saeima election year exceed what parties are planned to be provided starting next year.

What kind of independence of political parties could there be if state funding looks as though pocket change when compared to private donations?

Enough for the room and table, but what then?

If a person wants to manage important tasks and be taken seriously, found an office of a political party in their parents’ garage and ask friends to perform administrative tasks for sandwiches, this would not be a good solution. There is also development of a policy, development of the party itself, planning and preparations for elections.

Looking at expenditures of political parties and the wages paid to their employees, a conclusion comes to mind that state money alone would be enough to rent a table and try to convince office workers to work altruistically prior to elections so that the party is able to pay for pre-election promotion.

For example, the lasting government player National Alliance ‘All for Latvia – For Fatherland and Freedom/LNNK’ had spent EUR 42 160 on office rent and EUR 37 143 on wages. This year’s state funding of EUR 107 612 would be enough, even to afford internet services. However, pre-election promotion would require more finances.

Here’s an example from the other end – Latvian Association of Regions, for example, had spent EUR 21 on office rent and EUR 38 127 on wages in 2017. Because the party received EUR 43 176 from the state budget, even they would have no money left on promotional expenses.

It is not like elections are a lifelong process for the party and the office is needed to have a place where it is possible to drink coffee every now and then. Funding is also needed to work between elections, plan activities, communicate with society and attract new members.

«We expect Latvian parties to be free of corruption, be able to develop quality programmes in all kinds of sectors, offer capable people for important posts for ten times smaller amounts of money [in the context of Baltic States],» said politologist Iveta Kažoka in an interview to BNN.

«Parties become corrupt. This is why it is necessary to think about ways to make sure Latvian parties are not under so much pressure to seek funding from corrupted sources. The only solution that works in the European Union is providing sufficient funding from the state budget,» said Kažoka. She did not deny – state funding does not exclude the possibility of corruption.

How much money and for what?

New law amendments submitted to the Saeima together with 2020 budget plan provide for paying parties that pass the 2% barrier in Saeima elections EUR 4.5 per vote and EUR 0.5 per vote received in European Parliament and municipal elections. The parties that fail to enter the Saeima would be paid EUR 100 000 a year.

However, amendments also limit donations from private persons.

Political parties will not be allowed to receive more than EUR 800 000 from the state. Together with donations parties’ annual income is not allowed to exceed EUR 838 500. This amount will increase together with minimal wages.

Parties will be allowed to spend state funding on maintenance of their office and pay wages to employees, communication with society, including promotion, as well remain politically active.

Investments in the future?

«No money!» could be one of the most common phrases heard in the government and the Saeima. It is mentioned by both those who want money and those who divide it.

Police officers, fire fighters, doctors, teachers – the list of people in need of money is long. This is why the knowledge of political parties receiving EUR 4.1 million causes blood to boil in many people. Saeima deputies’ and ministers’ wages are not enough? Let’s not even mention the options of giving acquaintances lucrative posts!

This is an ideological question. There is no data that would make it clear the millions for parties will return to society in the form of minimal wage increase and better education system.

One can only speculate – had the funding of political parties come from the state from the very start or had the deposit system been adopted a decade ago, would the blow from the crisis of 2008 been as heavy and would pensions be larger? We can only assume if politicians of the time would work more on such a system in the interest of society than wealthy sponsors.

But now is not the time to fantasize. There is an option to at least try and see if this money can help some political party break away from serving wealthy people and their interests and instead focus on making life in Latvia better.

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