Wanted: Fiscally Responsible Political Parties

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Considering Israel is facing the third national elections in less than a year, isn't it reasonable to expect the political parties, whose campaigns are publicly funded, to act in a fiscally responsible manner?

Over the coming weeks, Israel’s political parties will likely spend roughly NIS 100 million on advertising, and at least double that sum on their election campaigns overall. There is no question that lively election campaigns are a key component in any true democracy; but can such a huge outlay be justified, following so closely on the heels of the last two election campaigns? Absolutely not. The parties’ unbridled spending on flashy digital videos, surveys, mass public events, strategic consultants, and advertising companies, could-- and should-- be far more modest.

It is important to remember that the monies spent by Israel’s political parties on their election campaigns are public funds. The state provides exceedingly generous public funding for party electioneering. A comparative study published by the Israel Democracy Institute on election funding around the world, found that the funding provided in Israel in an election year is the highest of all OECD countries. Nevertheless, Israel’s parties repeatedly end their election campaigns with financial losses. In the 2015 elections, the state provided the parties with funds totaling NIS 183 million, and the parties raised an additional NIS 5 million in donations, and yet their expenditures amounted to NIS 246 million—NIS 58 million higher than their total income. As a result, almost all the parties elected to the Knesset (with the exception of Hatnua and Hadash) ended the campaign in debt, in some cases reaching tens of millions of shekels. Unfortunately, while the data has not yet been published, there is no reason to believe that the story was any different after the last two election rounds 

In the best-case scenario, the parties cover the debts they accrued by taking a loan from the state. These loans are returned from the funding routinely allocated to parties over the course of a Knesset term, with these too being public funds, and which are supposed to support other activities, such as strengthening the parties’ connection and communication with the public. In the worst case, the parties disappear off the political map without repaying their debt, which will probably happen this time in the case of parties such as Atzmaut (Yair Golan, before joining Meretz) and the Green Party (Stav Shaffir)—each of which has borrowed around NIS 4 million from the state, but is not running to the Knesset.

In 2016, the parties’ irresponsible behavior was noted by the State Comptroller, who wrote that, “Not all the parties planned their expenses in advance … [while] some of the parties that did prepare election budgets, did not adhere to the budgetary frameworks they themselves designed,” and called on the parties “to prepare election budgets … in such a way as to ensure proper use of public funds.”

While the parties are always supposed to operate within a balanced budget, this time around they have a particular responsibility to do so. First, these are the third national elections within less than a year. There have been no substantial changes in the issues on the public agenda, and most of the parties and lists have already made their messages very clear and have run extensive promotional campaigns over the last year.

Second, very recently, with the dispersal of the Knesset, the parties decided to increase their election funding. The formula governing this is complicated, but we can take a look at one example: If Blue and White wins 33 seats once again in the 2020 elections, the result of this change will be an increase of NIS 15 million in its funding, from NIS 47 million to NIS 62 million. The parties’ decision to increase their election funding was highly improper, as it bypassed the independent public committee, headed by a judge, which is tasked with setting the level of party election funding. Moreover, in light of the state’s highly impressive generosity enjoyed by the parties, it is critical that they be required to stay within their budgets.

After the elections, we can and must discuss changes to the party funding laws so as to prevent a recurrence of the current situation. For example, the parties’ financial dependence on the state should be cut back, and they should be forced to invest part of the sums they continue to receive into worthy endeavors unrelated to the elections, such as research, public discussions, and promoting the representation in the Knesset and in the party of women, minorities, and residents of Israel’s social and geographic periphery. Right now, at the very least---we should be demanding of the parties that they conduct themselves responsibly and with financial restraint.

The article was published in the Jerusalem Post.