Proposals must be sanctioned by October 7 in order to be effective in the next elections
The Brazilian Congress resumed debates to approve a political reform. Proposals are advancing in the Lower House and must be sanctioned by the President by October 7 in order to be effective in the next elections.
The key points being studied are the creation of a public campaign-financing fund, a change in the electoral system, the end of coalitions in elections for state and municipal representatives and the establishment of a minimum performance clause for parties. This report outlines these changes and taking the 2014 elections for the Lower House as an example, concludes that compared to the current electoral system, the largest parties would increase while the smaller parties would decrease if there had been a so-called “big district” or mixed electoral system.
1) What are the key points being studied?
Key changes are the creation of a public campaign-financing fund, a change in the electoral system, the end of coalitions in elections for state and municipal representatives and the establishment of a minimum performance clause for parties (see summary table below).
(a) Creation of a public campaign-financing fund
The change comes after the Federal Supreme Court (STF) banned companies from donating to electoral campaigns. The amount earmarked for this fund will likely be subject to the constitutional spending cap and it will probably equal 0.5% of the federal government’s current annual net revenues, or BRL 3.6 billion for the 2018 elections. There is still no consensus as to how the funds will be split among campaigns for different roles (president, representative, etc.) and among parties (this matter should be addressed by infra-constitutional legislation later on). In the last proposal considered, 50% would fund campaigns for the president, governors and senators; 30% for federal representative roles; and 20% for state representatives. Additionally, assuming the size of each party in terms of elected officials in Congress in August 2017, 2% would be divided equally among the parties, 49% according to the share of votes for each party in the 2014 elections for the Lower House, 35% according to the number of Lower House seats by each party and 14% according to each party’s share of the Senate.
(b) Change in the electoral system to the so-called “big district” in 2018 and to a mixed system starting in 2022
Lower House representatives and senators have yet to reach consensus on this topic. In the “big district” modality, representatives with the most votes in each district (probably in each state) are the ones elected (see question 5 for details). In the mixed system modality, some (for instance, 50%) representatives are elected under the “big district” rule and some under the proportional system (probably in a closed list, in which votes go to the party, instead of the current open list, in which the vote goes to the representative or party). (See table on #5.)
(c) End of coalitions in elections for state and municipal representatives
In the new system, votes received by parties will not be added up according to coalitions. Importantly, depending on the electoral system chosen, this change may not make sense. For instance, in the “big district” option, state and municipal representatives who get the most votes are elected and coalitions become meaningless.
(d) Establishment of a performance clause setting a minimum share of votes for parties
The format of this measure is still being debated by Congress. The Senate already approved a proposal in this sense, establishing a minimum share of 2% of total valid votes in at least 14 states in order for the party to take over the position to which its candidate was elected. The Lower House is discussing minimum levels of 1.5% of national votes in 2018 (increasing by 0.5 p.p. in each election until 3% in 2030) and 1% of valid votes in at least nine states. Finally, parties that do not meet this performance clause could join a party federation.
(e) Other aspects being discussed
Congress is also discussing the end of reelections, a spending cap for electoral campaigns, direct elections in case of vacancy in executive roles in the first three years of their term, the elimination of vice-president, vice-governor and vice-mayor roles; party loyalty changes (a seat-holder who leaves the party through which he or she was elected will lose the position or role of deputy); and a fixed term of 10 years for Supreme Court justices.
2) What is the status of these changes in Congress? Are they moving on as ordinary laws or constitutional amendments (PEC)?
All abovementioned changes are being discussed as proposed constitutional amendments, and two are advancing in Congress (see item below). Importantly, the chosen form of distribution of campaign financing resources among parties and candidates and the mixed electoral system will need complementary legislation later on.
a) PEC 77/2003
The proposal includes discussions of public campaign financing, a change in the electoral system and the end of coalitions (points (a), (b) and (c)) and some items in (e), such as a campaign spending cap, direct elections in case of vacancy in the first three years of a term (advancing simultaneously under PEC 67/16, which was already approved by the Senate’s Constitution and Justice Committee), change in party loyalty rules, and a fixed term of 10 years for Supreme Court justices. The elimination of “vice-” roles and the end of reelections were part of the original proposal, but these were removed by the Special Committee.
The Lower House is ready to vote on a proposal (by rapporteur Vicente Cândido – PT/São Paulo) in two rounds before proceeding to the Senate. The exceptions are the end of coalitions and reelections, which were already approved by the Senate and, if maintained by the Lower House, would be ready for the president to sign.
b) PEC 282/16
The proposal includes the performance clause – (d), in addition to some items in (e), such as party loyalty changes.
It is currently moving through the Lower House’s Special Committee (by rapporteur Sheridan – PSDB/Roraima). The PEC was already approved by the Senate, but it will probably be altered in the Lower House, and in that case it must go back to the Senate.
3) What points have weaker consensus support and could be delayed?
Regarding public campaign financing (item a), there is still no consensus about how the resources will be split among parties and roles, but these aspects will probably be settled by complementary legislation later on.
Regarding a new electoral system (item b), the question is whether and for how long the “big district” option will be adopted. At this moment, it is likely to be adopted in 2018, migrating to the mixed system modality in 2022.
Regarding the end of coalitions (item c), apparently there is no dissent.
Regarding the performance clause (item d), the issue is how the rule will evolve over time.
Other items (item e) are not subject to much discussion right now, and some – such as the end of reelections – are unlikely to advance at this moment.
4) What is the deadline for changes so that they can apply to the 2018 elections?
Constitutional changes must be sanctioned by October 7 (one year before the 2018 elections).
5) What are the existing types of electoral system, and where are they adopted?
There are three types of electoral system: (i) by majority or district, in which candidates who get the most votes are elected; (ii) proportional, in which seats are distributed among parties and coalitions according to the share of votes that they get; and (iii) mixed system, in which some are elected under the first option and some under the proportional option. The table below summarizes the main characteristics of each, citing examples of countries that adopt them.
6) What would the composition of the Lower House elected in 2014 be under different electoral systems?
In both the “big district” and mixed system options, the number of seats held by parties that already have the largest number of Lower House representatives would increase, while the share of parties with fewer seats would shrink (see table below). The number of elected deputies from the top 5 parties in the 2014 election would rise from 261 under current rules to 276 in the “big district” and to 282 in the mixed system, while the elected deputies from parties with fewer seats would decline from 38 to 25 and 23, respectively (see table 3a). In terms of specific parties, the number of elected deputies from PMDB, PSDB and PT would increase, while it would decrease for PV, PTC and PSC (see table 3b)
 The party federation would require parties to be kept as a group during the four years they are elected to the legislature at the federal and state levels. Unlike the coalition system, in which parties eventually break up after elections, federations would have to last longer.