Political Party Funding V - Political Party Submissions

The fourth dealt with international experience. This brief deals with submissions made to Parliament by political parties while the sixth will focus on submissions made by civil society organisations.

Introduction

The Ad Hoc Committee on Political Party Funding has begun its work and has received input from the major political parties. All parties have supported the establishment of the Committee and the general need to review political party funding regulations in South Africa. However, there have been lively debates about how to reform the system to best serve the interests of transparency and accountability in a multiparty democracy. The points of contention have centred on: possible increases in public funding, the proposals for a disclosure requirement for private donations, other regulation of private funding and the creation and management of a multiparty democracy fund (MPDF). 

Public funding increases

The idea that there needs to be an increase in public funding for political parties is often justified as a means to lessen the propensity for corruption by alleviating dependence on private sources, while building South Africa’s democratic capabilities. The African National Congress (ANC) has said that it would only support this if it is preceded by an increase in regulation of private funding. The party also acknowledges that any money allocated to an increase in public funding would have to be found from taxation, cuts in other government expenditure programmes or increased public debt and that a strong case would be needed. However, they argue that increased funding could be allocated to activities that support democracy and enhance citizen participation in politics, such as party operational and administrative costs and policy development. The Democratic Alliance (DA) oppose any increases in public funding, which they see as a possible strategy on the part of the ANC to plug funding gaps that have been created by funders refusing to be associated with the party due to its performance in government and protection of corruption.

Private disclosure

The issue of whether parties should be obliged to disclose their funding sources, and how this should be done, is central to the current debate around the regulation of political party funding. The ANC supports the disclosure of private sources of funding when the amounts are above a certain threshold. The party has had a number of policy conference resolutions on this topic and have stated that they believe the current lack of disclosure undermines the South African Constitution and dilutes citizens’ voices. The Economic Freedom Fighters (EFF) have supported this position stating that they believe it is necessary in order to avoid “political coup d’etats”. Conversely, the DA have raised concerns about mandatory disclosure laws, saying that it could pose a threat to multiparty democracy in South Africa. The Party argues that there is no credible link between non-disclosure and corruption. Additionally, they fear that it will weaken the ability of opposition parties to raise funds, as companies and individuals who choose to fund opposition parties rather than the ruling party will be at risk of victimisation. The DA has therefore argued that, in order to better regulate the system of private donations, parties should report to the Independent Electoral Commission (IEC) who only need to act if there was evidence of wrongdoing. This would protect donors’ rights to privacy and is similar to the way in which personal financial disclosures are made in Parliament.

Other regulations

One of the most contentious issues in terms of regulations to limit private donations is whether, and to what extent, private funding from foreign sources should be allowed. The main point of contention was whether foreign individuals or companies should be allowed to donate to South African political parties. The ANC is against any foreign funding, stating that they fear it could be used to exert undue influence on South African politics. The DA has labelled this as an isolationist view and has said that they believe that South Africa can benefit from foreign ties. They have also agreed with the EFF, who have argued for a practical and implementable system, pointing to numerous grey areas, such as the large number of South Africans with dual citizenship – many of whom live abroad – and the high number of foreign companies with South African connections.

There is general agreement amongst the parties that government departments and state owned enterprises (SOE) should be banned from contributing to political parties. However, the DA has raised concerns about how SOEs are defined in the legislation to ensure that there are not loopholes allowing companies who are largely state owned to be exempt. The EFF has also pushed back on the idea, proposed by some civil society organisations, that there should be a ban on donations from companies who do business with the state. Giving the reason that many of these companies are small and black owned and would therefore be unfairly excluded, despite not having major influence. The DA have also raised the lack of regulation around the use of state resources for political party purposes as very problematic.

The Multi-Party Democracy Fund

While all parties were in favour of the idea behind the creation of a MPDF, there is disagreement around how it is to be managed. The EFF argue that there should be a single fund for political party funding and that existing legislation made it clear that private donations could be made to the Represented Political Parties Fund. This would avoid the extra administration of managing two funds and potentially reporting to multiple bodies. The ANC however argues that two funds are needed in order to make a clear distinction between public and private funds. The DA also support having two funds but have raised concerns about the IEC’s ability to manage both. Rather advocating for a different body to manage the private funds. At present, the committee has decided to have two funds and have the IEC manage both in the interim. But this is subject to consultation with the IEC, who have raised concerns about their capacity to do this, as well as with the public. It has also been agreed by all parties that SOEs, government departments, proceeds from the lottery, proceeds from crime, foreign governments and any entity funded by the South African taxpayer should not be allowed to donate to the fund.

Conclusion

The main issues of debate between political parties have been whether there should be increase in public funding for political parties, the extent of the need for disclosure in private funding and proposed other regulations, whether foreign funding in any form should be allowed, and about the creation and management of a Multiparty Democracy Fund.

Rafael Friedman
Researcher
rafael@hsf.org.za

Sources

• Council for the Advancement of the South African Constituion. Submission on Public Funding of Represented Political Parties Act and Regulation of Private Funding of Parties. Cape Town: Council for the Advancement of the South African Constitution, 2017.
• Parliamanetary Monitoring Group. Political Discussion on Regulatory Framework (Continued). Cape Town: Parliamanetary Monitoring Group, 2017.
• Parliamanetary Monitoring Group. Political Discussion on Regulatory Framework. Cape Town: Parliamanetary Monitoring Group, 2017.
• Maimane, Mmusi. South Africa is on the cusp of a new beginning. Johannesburg: Democratic Alliance, 2017.
• Mkhize, Zwelini. Funding and Regulation of Political Parties to Deepen Democracy in South Africa. Johannesburg: African National Congress, 2017.
• ANA Reporter. "Party Funding: Disclosure Could Pose a Threat to Democracy." IOL Online, July 29, 2017.