ONE YEAR IN: PARTY FUNDING LEGISLATION NEEDS TO BE STRENGTHENED

1 June 2022

We applaud the Electoral Commission (IEC) for timeously publishing the 4th and final set of disclosures of the first financial year since the promulgation of the Political Party Funding Act (PPFA). The disclosures, thus far, have given us crucial insight into who funds and influences our politics. However, they have also laid bare loopholes in the legislation, which limit it from doing what it purports to do. As we approach the next phase of the legislation’s lifecycle, MVC will call for a strengthening of the party funding legislation.

The PPFA exists to enhance political transparency and the rights of voters and to limit the toxic relationship between money and politics. The past year has shown that it is, undoubtedly, one of the biggest improvements to our democracy since 1996.

The PPFA has been effective

Although only 2 political parties have disclosed receiving donations over the threshold in the period 1 January – 31 March 2022, the past year has shown the effectiveness of such legislation.

Firstly, it has given us important insight into the relationship between money and our politics. We see this through some of the disclosures that have been made. Key examples are: 

• The ANC’s heavy reliance on large donors, which it has political and other links to, such as United Manganese of Kalahari, Chancellor House and Batho Batho Trust; 
• One of the country’s wealthiest families, the Oppenheimers and businessman Martin Moshal’s massive donations to the DA and ActionSA; 
• Numsa’s 3Sixty Life’s substantial contributions to EFF, GOOD, ANC and ATM; and 
• Large donations to various parties from African Gold Limited and Harmony Gold Mining Company. 

Importantly, the Multi-Party Democracy Fund has raised a respectable amount of R5,012,000. This will be distributed by the IEC to parties represented in the national and provincial legislatures. 

Another sign of the PPFA’s effectiveness is the ANC’s National Working Committee’s call to weaken the legislation. In December 2021 it was revealed that the party intends on expanding the annual threshold for disclosure from R100,000 to R250,000 – R500,000 and expand the annual cap on donations from R15 million to R50million – R100millioni, or just scrapped entirely. This is because the ANC has a funding crisis, in part due to limitations the Act places on private influence.

The PPFA needs to be strengthened 

However, we still do not know the full extent of private funding and are far from limiting the toxic relationship between money and politics The PPFA does force political parties to disclose Audited Financial Statements to the IEC by 30 September 2022 and this will give us deeper insight into private funding and influence. But if it is to achieve what it purports to, the PPFA needs to be strengthened.

In the next phase of the Act’s lifecycle, we will work towards guarding against threats to the Act and strengthening it. The Act must ensure that Holding companies, especially those with political links (like Chancellor House), disclose the source of their donations. It is also clear that the disclosure threshold of R100,000 needs to be radically reduced to deepen transparency and the R15 million cap on annual donations per donor needs to be slashed to limit narrow private influence in our politics. We also realised the importance of having well-funded political parties and independent candidates in our multi-party democracy and this must be through public-funding mechanisms to enhance accountability and build people’s power rather than for power to be shaped by money. 

Statement issued by Sheilan Clarke, My Vote Counts, 1 June 2022