Understanding the Political Party Funding Act: A step towards combating corruption - Cosatu
Solly Phetoe
The Political Party Funding Act, adopted by the 6th Parliament and signed into law by President Cyril Ramaphosa in 2021, is one of the most important interventions by the ANC-led government to remove the cancer of corruption endemic in our body politic.
This is not just a threat to the ANC as the leading political party, but to all parties, more so in the era of coalitions where even a 1% party can enter the Cabinet, a Provincial Executive Council, or a Mayoral Committee.
It is a threat to working-class communities who depend upon their taxes funding a well-oiled developmental state geared to serve the needs of the poor and not the elite, let alone to be siphoned off by parasitic tenderpreneurs.
The damage done by the decade of state capture to the state, State-Owned Enterprises (SOEs), local governments, and the economy is well known. It has been the working class who paid the price for this pandemic of corruption through wage freezes, unpaid pension funds, retrenchment, the collapse of SOEs, and the deterioration of critical infrastructure and state services.
Society has embraced the call by the President and government to declare war on corruption in all its forms. Key to winning this war is to ensure political parties themselves are protected from it.
The Act provides tough medicine and support to political parties simultaneously.
Parties are required to declare quarterly all donations above R100 000, donors are restricted to a cap of R15 million a year per individual, and South African and international state institutions are not allowed to fund parties except through the established funds of Parliament, the Provincial Legislatures, and the Independent Electoral Commission (IEC).
All of these interventions were carefully crafted through extensive Parliamentary hearings, gathering lessons from the Zondo Commission of Inquiry into State Capture and Corruption and international best practices. They were a deliberate and progressive response by the ANC and supported by the majority of sober political parties.
If we had failed to go this route of cleansing, the very fabric of our constitutional democracy itself was at risk.
As with all new transformational laws, there have been teething problems with implementation. Some will take further tough love, e.g., a few parties routinely fail to submit or disclose their donations to the IEC quarterly as required.
The IEC, Parliament, and the Legislatures must crack the whip and withhold further funding releases to the offending parties, as they are empowered to do, until they comply with the law. Effecting change in political culture is the intention of the Act.
The National Assembly, as necessitated by a High Court ruling, is currently reviewing the cap on donations and the threshold for disclosures.
Elections are incredibly expensive, especially for large parties having to cover all 257 municipalities and nearly 6 000 wards. Some donors have been keen to assist parties, and to disclose their donations publicly, but have been hamstrung by the annual cap on donations.
In an ideal scenario, the state should fund political parties to remove their dependence upon fundraising, in particular from wealthy businesspersons who all too often may expect something in return, be it a policy shift or a tender. That is the destination we must seek to achieve, where parties can be loyal to voters and not funders.
We must recognise that in the current fiscal scenario, where the government has to prioritise funding critical frontline services for the working class and the economy, funding parties will not be at the top of the list.
A fair compromise for this period of transition in party funding is to raise the cap on donations to enable parties to pay their staff, maintain their constituency offices, engage with voters, and run their campaigns. Political parties are an essential anchor of our constitutional democracy.
If parties are not able to legally raise money, we are at risk of them collecting sums in plastic bags from criminal elements intent on state capture 2.0.
The second part of the National Assembly’s review is the threshold by which parties must disclose donations. Currently, that has been set at R100 000 per individual annually. The danger of such a high threshold is that those with criminal intent will simply make donations of R99 000 to avoid disclosure or launder donations of similar amounts through relatives.
This is a fundamental Achilles’ heel of an otherwise sound Act. Parties will be tempted by donors begging to keep their identities secret and want to raise the threshold. This is a recipe for indulging dubious donors with unsavoury intentions but providing ourselves with the false comfort that these are relatively small amounts.
If we want to win this war against the scourge of corruption, the struggle of our generation, then we must maximise transparency and protect our body politic and the state from its temptations.
The threshold below which donations need not be disclosed should simply be removed. Mechanisms to make quarterly reports to the IEC less cumbersome can easily be found. Bank statements provide a full list of every rand and cent in one’s account, so the work is not insurmountable.
Political parties may moan that it’s additional work for some accountants, but it’s not the end of the world. Trade unions are required to submit audited financial statements to the Department of Employment and Labour annually detailing every rand and cent received and spent. Failure to comply with this requirement can lead to that union or federation’s deregistration.
If workers with far less means than political parties can manage this simple responsibility of leadership and accountability, then surely our politicians who ask voters to entrust them with the far more onerous task of running the state and its R2 trillion budget can do so!
Change is never easy, but we must be consistent at all times with the progressive mandate set by voters and the Constitution. The war against corruption cannot be won with half-hearted platitudes. It requires bold and decisive leadership.
Cosatu General Secretary Solly Phetoe
BUSINESS REPORT