Political party funding IX: Legal Issues

Anton van Dalsen writes on the recent developments in this regard

Political party funding IX – Legal Issues

This brief analyses a number of outstanding legal issues surrounding political party funding. Including; the recently published draft legislation, the Western Cape High Court’s landmark ruling in a case brought by My Vote Counts, and the challenges that exist at provincial and municipal level.

The Constitution’s provisions

Section 236 of the Constitution provides that “to enhance multi-party democracy, national legislation must provide for the funding of political parties participating in national and provincial legislatures on an equitable and proportional basis”.  In addition, the Constitution also provides for rules to be made by the National Assembly to provide for financial and administrative assistance to each party represented in the Assembly, in proportion to its representation, to enable it to perform its functions in the Assembly in an effective manner.[1]  The Constitution provides for a similar arrangement in the case of provincial legislatures.[2]

National legislation

The national legislation in this respect is the Public Funding of Represented Political Parties Act, 103 of 1997.  It establishes a Represented Political Parties’ Fund, for the purpose of funding political parties that participate in Parliament and provincial legislatures.  The Act envisages the Fund to be financed by money appropriated by Parliament and by contributions and donations from other sources.  The chief electoral officer, acting in the capacity of head of administration of the Electoral Commission, is responsible for the management and administration of the Fund. 

The Act recognises that every political party is entitled to be allocated money from the Fund for any year that it is represented in the National Assembly and/or in any provincial legislature and states that “The moneys so allocated may be used for any purposes compatible with its functioning as a political party in a modern democracy.”  Political parties which receive funds from this source have to keep accounting records, reflecting all transactions in relation to these funds.  In subsequently published regulations,[3]it was determined that 90 per cent of the amount of funding was to be calculated on a proportional basis and 10 per cent to be divided equally between the parties represented in the legislature.

Provincial legislation and its problems

The Public Funding of Represented Political Parties Act contains no provisions which permit provincial legislatures to adopt their own legislation on this topic, but a number of provinces[4]nevertheless adopted legislation between 2007 and 2010, providing for the funding of political parties participating in their provincial legislatures.  From the text of the preambles in this provincial legislation (which are similar in lay-out and wording), it seems as if the provincial legislatures did not consider whether they were actually empowered to enact this legislation. 

For example, the Limpopo provincial legislation refers in its preamble to the national legislation in this regard, but makes no reference to any empowering legislation for it to do so as well.  It simply states that “supplementary funding of political parties participating in the Limpopo Provincial Legislature on an equitable and proportional basis further enhances multi-party democracy”.  It provides that the fund must be credited by money appropriated by the Limpopo Provincial Legislature.  However, it is not at all clear to what degree legislation of this nature has actually been used by the provinces to provide funding for political parties on a provincial level.

The principles regarding the legislative capacity of provinces is set out in section 104 of the Constitution and provides that provincial legislatures are empowered to enact legislation in functional areas specified in certain annexures to the Constitution, if they are expressly empowered to do so by national legislation, or if the Constitution envisages the enactment of such legislation. 

In a Constitutional Court judgment[5], it was held that any empowerment by national legislation for provincial legislation to be enacted, has to be express and that if the Constitution envisages any legislation to be enacted by provinces, this has to be stated clearly.  The judgment states that “Our constitutional scheme does not permit legislative powers of the provincial legislatures to be implied.”  As a consequence, it seems clear that the legislation passed on this subject by various provinces is completely outside of what they are permitted to do and there can be little doubt that the legislation is accordingly invalid.

However, it is legal for the provinces to use their equitable share of national revenue and other revenue not earmarked for other purposes to distribute money to political parties in their provinces, and this is provided for in both the Constitution and national legislation. 

No funding for political parties in municipalities

Neither the Constitution nor any other legislation makes provision for the funding of political parties who are represented in municipalities or local government.  Such funding is not within the constitutionally defined competences of local government and is therefore illegal.  It is only on national and provincial levels that such public funding is provided for.      

Draft legislation recently published for comment

The Draft Political Party Funding Bill was published on 19 September 2017, with public comment requested by 16 October 2017.  This Bill seeks to amend, in a comprehensive manner, the model of public and private funding for political parties on national and provincial level.  It also provides a mechanism for regulating private funding, especially in relation to disclosure.  It would, if passed in the intended form, bring about a fundamental change to the way in which political parties are funded in South Africa.  We shall provide our comments on this Bill to Parliament and will publish our submission on our website. 

The regulation of political party funding in other countries indicates that there are highly imaginative ways in which political parties around the world dodge such regulations.  Two things follow.  First, obtaining consensus between all political parties about the rules of the game is very important.  Secondly, there are limits to the effectiveness of any legislation in this field.

The Western Cape High Court Decision

The Western Cape High Court decided[6] on 27 September 2017 that information about the private funding of political parties registered for elections for any legislative body established under the Constitution is reasonably required for the effective exercise of the right to vote in such elections and to make political choices.  It also declared the Promotion of Access to Information Act invalid in so far as it does not allow for such disclosure, but suspended this invalidity to allow Parliament to remedy the Act and to allow for the recording and disclosure of private funding of political parties and independent candidates.

The judgment did not view it as a reasonable possibility that private entities may not want to donate money to opposition parties if the donations have to be made public, for fear of being disadvantaged in business dealings with Government.   Also, it did  not define a floor  below which donations to political parties do not have be reported individually, though it would be reasonable to require political parties to report the aggregate of such donations.

Anton van Dalsen is Legal Counsellor at the Helen Suzman Foundation.

This article first appeared as an HSF Brief.

[1] Section 57(2)(c) of the Constitution.

[2] Section 116(2)(c) of the Constitution.

[3] Proclamation R17, Government Gazette 19478 of 20 November 1998.

[4] Eastern Cape (later repealed), Free State, Gauteng, Limpopo, Mpumalanga, Northern Cape, Kwazulu Natal and North West (later repealed).  The Western Cape does not seem to have adopted such legislation.

[5] Per Ngcobo CJ, in the matter between the Premier: Limpopo Province and the Speaker of the Limpopo Provincial Legislature, decided on 11 August 2011

[6] In the judgment in the case of My Vote Counts v President of SA and others