March 20, 2019

Political party funding bill passed at last. But why now?

Close to the end of March (the 27th to be exact), the National Assembly passed the long-awaited Political Party Funding Bill, registering a great victory for South Africa’s democracy.

It is now on its way to the National Council of Provinces, and unless it hits any unexpected hazards on the short path left to the status of being passed into law, a 20-year-long process will reach finalisation at last. So why has it taken this long, asks MIKE LAW.

Political parties have always been able to hide behind the disguise of private bodies, immunising themselves from the various constitutional accountability measures, including financial transparency, that apply to bodies that exercise a public power or perform public functions. This has made them an easy target for dubious influence peddlers.

Political parties wont be able to immunise themselves from the accountability measures

But in reality, political parties do perform vitally important public functions. Whilst political decisions are rubber stamped in the formal institutions of state, real power resides in the hands of the party caucus – it is there where key policy decisions are made and the leaders of our country are effectively appointed. The lack of transparency in the funding of political parties has created a deep level of public mistrust and several infamous instances of corruption.

Finally, political parties will now be required to publicly disclose where they are getting their money from.

When I first heard last year that Parliament was establishing a new ad-hoc committee on the funding of political parties I was sceptical. During more than two decades of both legislative and judicial attempts to reform political party funding in South Africa have all been met with firm resistance and a clear lack of political will on behalf of the major parties.

So why now?

The preferred explanation is that it is one of several recent attempts by the ANC to clean up its act and create a more accountable and transparent multi-party system of governance. The recent establishment of various parliamentary and judicial commissions of inquiry into corrupt activities in state-owned enterprises and other public bodies, the clamping down on corruption with the Gupta summons and Zuma’s impending corruption trial as well as the axing of at least some of the questionable Ministers that contributed to South Africa’s downfall may support this.

Indeed, while there are many aspects to this Bill (and even more were debated), the one thing that the ANC was always clear on during the sittings of the committee was that there must be disclosure.

The Democratic Alliance (DA), however, was not convinced as to the good intentions of the ANC in this process. Since the outset it appeared to oppose the Bill. The opposition has also been the only large party to consistently oppose the application in the courts by civil society organisation My Vote Counts which seeks to declare the Promotion of Access to Information Act (PAIA) invalid for its failure to provide for the disclosure of donations to political parties.

There is merit in the DA’s concerns. One of the main fears is that requiring the disclosure of political donations will disincentivise entities from donating to opposition parties because if they are seen as siding with the opposition, this would reduce the chances of such entities being granted government contracts.

There could also be a danger of “donor intimidation”. Social media trends and aggressive public rhetoric is becoming increasingly common. In light of recent labelling of parties, whether legitimate or not, donors may be accused of “perpetuating white monopoly capital”, “supporting corruption” or “promoting fascism” by donating to a particular party. This could act as a deterrent for donor corporations who fear their public image being tarnished or painted with a one-colour brush.

In line with this, DA MP James Selfe argued in the recent debates on the Bill that it will make it more difficult for certain parties to raise money honestly. “But then, I suspect, that was the purpose of the Bill all the way along,” said Selfe.

It was slightly surprising, therefore, that despite posing the main opposition to the Bill throughout the process, the DA supported the Bill at the end, with Selfe stating that in the context of state capture and corruption “it is very difficult to oppose disclosure”.

What was even more surprising was that the Economic Freedom Fighters (EFF) did not support the Bill. The EFF championed the Bill all the way through the ad-hoc committee process. EFF MP Leigh Mathys, who represented the EFF on the Committee, expertly played a key role player in the debate and firmly supported the transparency and accountability that the provisions of the Bill would bring.

The primary reason for withdrawing their support, as stated in the debate by EFF MP Natasha Ntlangwini, was Section 10 of the Bill. This provision prohibits donors from making a donation directly to a member of a political party other than for political party purposes. The argument of the EFF is that it prevents people funding matters such as education for members and children of members of a party. There are a few problems with the EFF’s objection.

The first is that while Section 10 could be better worded, it will be interpreted in line with its purpose – which is to prevent donors subverting disclosure laws by making donations directly to members of parties rather than the party itself and funding intra-party power struggles.

The second troubling aspect of the EFF’s objection is that they did not raise it firmly during the committee sittings in a process that lasted almost six months. This provision in the Bill is not new, having appeared in several draft versions before, and the fact that the EFF supported the Bill until the last minute led some to draw alternative conclusions.

Outside of the three largest parties, there was a strong and unified voice among the smaller parties. They championed the reform of the public funding aspect of the Bill. Parliament allocates roughly R150 million per year to political parties in terms of Section 236 of the Constitution which provides for the funding of political parties on an equitable and proportional basis.

However, the Public Funding of Represented Political Parties Act (1997) skews this allocation heavily in favour of the proportionality element with 90% of the money allocated on this basis. The wording of Section 236 of the Constitution clearly envisages that a largely equal balance be struck between the equitable allocation (i.e. every party gets the same) and an allocation proportional to the amount of Parliamentary seats held.

The clear injustices of the current allocation of public funds, which heavily favours larger parties and stifles the expansion of smaller ones, has long been criticised, and correcting this was naturally one of the main priorities for the mid- to smaller-sized parties during this process.

They were partly successful. The allocation will now be two thirds in terms of proportionality and one third equitable. This is an improvement, and the smaller parties seemed satisfied, but it still begs the question whether it achieves what Section 236 envisages. The EFF especially continues to doubt the constitutionality of the new formula.

Their argument is that the Constitution envisaged a 50/50 balance between proportionality and equality – legally speaking, they are probably correct.

Funding of political parties and its regulation has always been a sensitive topic for the parties themselves. At the outset, it was clear that each party came into this process with their own objectives, whether they were express or implied.

There was a clear scepticism as to the real intention of the ruling party behind pushing the Bill, and about the true intentions of the parties that opposed it. This is not abnormal. It could be argued that there is a political motive or agenda, which could be good or bad, behind any significant legislative reform.

Whatever the true intentions of the parties were during this process, the net result is a more transparent and accountable framework for the funding of political parties who are the primary flag-bearers of our multi-party democracy and have long been perceived as being recipients of “dodgy” funding.

In addition, there will be increased public funding for the smaller parties which will benefit a more competitive electoral environment. Politics aside, the Party Funding Bill is definitely a victory for our democracy.

Mike Law

Law is a political-legal researcher and analyst holding a masters degree in constitutional and administrative law from the University of Cape Town. He played an active role in the Political Party Funding Bill process.


Last modified on Monday, 02 April 2018 18:55

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