The Political Party Funding Act of 2018 is on the president’s desk awaiting promulgation. The act took into consideration the Constitutional Court’s My Vote Counts ruling of June 2018, when it found the Promotion of Access to Information Act of 2000 to be constitutionally deficient for failing to provide for the recording, preservation and disclosure of information on private funding of political parties and independent candidates.

While the president was considering the act, the Constitutional Court held in June 2020 in the New Nation Movement case that the Electoral Act of 1998 is unconstitutional to the extent that it requires of adult citizens to be elected to the National Assembly and provincial legislatures only through their membership of political parties. Individuals, in fact, have a right to contest for seats in parliament and provincial legislatures in line with section 19 of the constitution, which provides that every citizen is free to make political choices, including the right to form a political party.

Since both judgments were handed down in June, an early takeaway is that June looks to be a good month of the year for the advancement of democracy, if one takes into account the signing of the Freedom Charter on June 26 1955 and the Soweto uprising of June 16 1976.

Disclosure of political party funding will be good for democracy. That’s why the president should promulgate the act once the constitutional deficiencies are cured.

The disclosure requirement in the Political Party Funding Act is not new. One of the founding values of our constitution is a multiparty system of democratic government, as encapsulated in section 236 of the constitution, which provides for the public funding of political parties in the following terms: “To enhance multiparty democracy, national legislation must provide for the funding of political parties participating in national and provincial legislatures on an equitable and proportional basis.”

In the furtherance of this constitutional imperative parliament approved the Public Funding of Represented Political Parties Act in 1997, which came into operation in April 1998. A fund was established to make provision for the funding of political parties participating in parliament and the provincial legislatures. It took in monies appropriated to the fund by parliament and contributions and donations from any other sources, whether within or outside the republic.

It was envisaged in the act that the funds would be managed by the Independent Electoral Commission of SA (IEC) and allocated to political parties in terms of a formula based on equity (a basic amount would be given to all political parties represented in parliament) and on a weighted scale of representation (based on the number of seats).

Modern democracy

However, about 10 years ago parliament decided that undisclosed and unlimited foreign funding could detract from the sovereignty of the state, and undisclosed and unlimited funding from private sources, whether from inside or outside the country, could detract from the principle of transparency and contribute to political party capture. Hence the need for change.

In light of the New Nation Movement decision the president will have to refer the act back to the National Assembly. Other areas in the act also warrant further attention. One is the notion in section 7(1) that SA is a modern democracy. Older states have taken upwards of 400 years of state- and nation-building processes to reach the level of being described as mature and modern democracies. We have a long way to go. It may be correct to describe SA as a constitutional democracy.

Still in line with the notion that we are a modern democracy, section 7(1) also prescribes how the funds should be used. One challenge is how the IEC would police the use of funds by political parties without invading their privacy. Another challenge is that political parties have to maintain an infrastructure to service their members. For example, the ANC has 53 fully equipped and staffed offices countrywide. The act makes no mention whether the funds can be used for this purpose.

The upper annual limit of R15m in donations to political parties will render the big three political parties dysfunctional. A related challenge is that political parties such as the ANC and EFF have diverse membership bases and consequently have to reach out to their members in all the official languages. This is expensive. 

Another area that warrants a rethink is the prohibition of donations from foreign governments. Although the act makes an exception for donations from foreign governments for the purpose of training or skills development of political party members and policy development of the party to a maximum of R5m per financial year, two key reasons why established democracies fund emerging democracies seem to have eluded the drafters of the act. Far from trying to subvert the sovereignty of the state, foreign governments may want to contribute financially to advance electoral integrity, in order to create a conducive environment for their citizens to expand their business interests in SA. They may also have geostrategic military interests in the region that require a stable democracy.

If the objective of the act is to regulate public and private funding of political parties and the disclosure of donations, two separate funds are not needed. Ideally, all appropriations from parliament and donations from within and outside the country, which traditionally go directly to political parties of choice, should be rerouted to a single fund managed by the IEC, with full disclosure. The upper limit would not apply because the funder will be funding the advancement of democracy and not a specific political party.

Thereafter the IEC could allocate the funds to political parties on the equity/representation formula. There is no reason for a foreign or domestic funder not wanting to disclose that it is contributing to SA’s political stability, even if it is acting in its own material interest. If funders still want to support political parties directly they have no option but to comply with the R100,000 annual limit imposed by the act.

Once parliament has dealt with these issues another feather will be added to SA’s cap as a young but trail-blazing democracy.

• Naidoo is ANC legal adviser.

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