Financial Reports of Political Parties Still Hard to Find

Independen – Ahead of the general election, political parties are busy campaigning, whether supporting a presidential candidate or legislative. Of course, this requires no small amount of funds. Then what about political parties’ financial transparency, both their income and expenses?

In the Public Information Disclosure Act No. 14/2008, political parties were clearly stated as one of the public bodies that are legally bound to the Law. And one of the merits of being a public body is that it is eligible for funds –partially or fully, from the national government (State Budget or APBN) or provincial (Regional Budget or APBD).

The amount of State funds that parties may receive depends on the number of votes they garner on the last election. In 2018, the worth of each vote had gone up from Rp108 to Rp1,000 (7 cents). Thus, for example, the National Democratic Party (Nasdem) received 8.4 million votes in the 2014 General Election. Therefore, the party is eligible for an Rp8.4 billion fund each year. Or the National Awakening Party (PKB) that was voted by 11.2 million, they have been receiving Rp11.2 billion in funding per year.

However, as a public body, political parties are also obliged to report the use of these funds to the public. But in reality, one would be pressed hard to find any kind of financial statements of these political parties. Of the 10 parties that have entered the parliament, only four parties that made their state-funding reports publicly available: PKB, Nasdem, Gerindra (Great Indonesia Movement Party), and PKS (Prosperous Justice Party). Other parties did no such thing.

Availability of Financial Report at Political Party Website

 

As a public body, political parties have the obligation to provide public information services or procedures for obtaining public information from the party. Of the 10 political parties mentioned above, only three that provide public information channels via telephone and e-mail: PKB, Gerindra, and PKS. The Nasdem Party only provided a telephone number for the service. The other six parties provide no public information service at all.

“Transparency of political parties primarily regarding their finances has always been a problem. There is a problem of the paradigm of party administrators who think that parties are not a public body,” said Erik Kurniawan, a researcher at Election and Democracy Syndication.

In 2015, the Indonesia Corruption Watch (ICW) conducted a public information test to the Central Information Commission (KIP) and requested for the financial reports of political parties. Most of the parties at that time objected to disclosing their financial statements. But since it had been mandated and stipulated in the 2008 Public Information Disclosure Act, it must be enforced.  Even though until now, not all parties have complied.

Within the Law, there is a criminal provision for public bodies that deliberately restrict public access to information and Article 52 stipulated that offenders can be sentenced to a maximum of one-year imprisonment or Rp5 million fine. However, a police report needs to be flown first, and so far, no one has done it.

Erik Kurniawan from the Indonesian Parliamentary Center suggested changes to the Election Law regarding state funding for political parties. According to him, Indonesia could emulate the system currently in use by the German government.

“Germany employs a similar schematic [to Indonesia]. Political parties receive state funding according to the number of votes they get,” Erik said.

The difference is that the funds are not given in advance. But instead, the State would only disburse funding as compensation for campaign expenses.

“For example, a party received 4 million votes, which converts to EUR 4 million in state funding, this is the party’s budget cap,” Erik continued.

Then the party would have to submit a report on how much money they can raise on their own. For example, EUR 1 million. Then the State would match the amount, EUR 1 million funding, which was still within the budget limit. The reporting should also include the names of party donors, so the process is transparent. Later the use of these funds has to be reported and conducted openly.
The above’s German system is linked to the country’s taxation. Every individual who contributes to a political party or a Non-Governmental Organization (NGO) will get a tax deduction. Furthermore, all party financial transactions are carried out through the official party account, so that both income and expenditures can be well recorded.

This German system is what Erik’s been proposing to be adopted into Indonesia's Election Law. Once a party’s financial report is open, then other aspects such as work programs, the performance of the House of Representatives (DPR)’s members, etc. can be better monitored.

 

 

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