Broke ANC wants more tax money

The ANC says more public funding will lead to better financial transparency. (David Harrison, M&G)

The ANC says more public funding will lead to better financial transparency. (David Harrison, M&G)

The ANC wants more money from the government. In a discussion document aimed at laying the groundwork for the ANC’s national general council next year, the party argues that there needs to be greater public funding of political parties in South Africa.

The document, seen by the Mail & Guardian, was presented last month at the ANC’s national executive committee (NEC) meeting by the party’s treasurer general, Zweli Mkhize.

This proposal has its roots in resolutions of the ANC’s 53rd national conference in Mangaung in 2012, which directed the ruling party to “explore mechanisms of expanding political party funding in order to promote and support democracy”.

The discussion on increased funding has been resuscitated at a time when the ANC is feeling a severe financial squeeze. Mkhize warned at the NEC meeting of the fear of donor funding drying up.
Also, the party’s liabilities far exceed its assets, according to Mkhize’s financial report that the M&G has seen.

“Fundraising remains the most important source of revenue, but given the large amount of funds received from donors over the last 20 months, the risk of this source of funding dwindling due to donor fatigue is of concern,” Mkhize said.

In the past financial year the ANC received more than R304-million in donations, which amounted to 68% of the party’s entire cash flow. But this is not enough to cover the party’s needs. It received R142.7-million from the Independent Electoral Commission (IEC) fund between January 2013 and October 2014. Of this amount about R71-million was in the past financial year, constituting 16% of the ANC’s overall income.

The ruling party will argue that the need for increased political party funding will enhance democracy.

“Increased public funding will assist in strengthening democracy, eradicate the influence of private donors on political parties, build transparency and accountability of political party finances and ensure the financial sustainability of the ANC,” Mkhize’s document reads.

Political parties do receive public funding through the represented political parties’ fund, administered by the IEC. The commission distributes more than R500-million a year to political parties represented in Parliament.

“Most of the funds provided by Parliament to the ANC are utilised by the ANC caucus and cannot be utilised for party activities outside Parliament,” the ANC’s discussion document said.

Public funding
The party raised concern that “important political party activities” such as election campaigns, voter and political education, and policy development are not directly publicly funded.

The ANC believes that increased public funding will result in “more financial transparency on the sources and uses of funds”.

Also of concern to the ANC is unregulated private donations, which the party said was undesirable and that “an increase in public funding would lessen the overreliance on private donations”.

Interestingly, the ANC is worried about foreign donors who fund political activity, even though the party itself has benefited from that.

Its concerns may have something to do with the emergence of break-away parties. The ANC has increasingly suggested that the Economic Freedom Fighters (EFF) was funded by “foreign forces”. The ruling party has also raised concerns about the funding of the United Front, a new political player formed by the National Union of Metalworkers of South Africa (Numsa).

Foreign donors
Earlier this year ANC deputy secretary general Jessie Duarte said the EFF and Numsa were “anti-revolutionary” and accused them of working with foreign donors to “destabilise” the government.

One NEC member said the ANC feared that foreign donations were sometimes used to cause trouble for the governing party. “Some of the forces who don’t necessarily agree with our approach can fund other organisations that oppose us in order to cause instability in the country. Sometimes they fund organisations that don’t necessarily contest elections, but operate as concerned and lobby groups.”

But the NEC member admitted the ANC was no longer receiving as much from foreign donors as it used to. “Some foreign donors believe that we are now a governing party and there is a feeling that we should be able to raise money on our own.”

There is a bigger challenge. The NEC member claimed that some foreign donors demanded kickbacks from the ANC in return for donations. “They say, ‘because you are in government when I fund you I must be given something in government, I must benefit financially through contracts’. We don’t want to do that. We might be desperate for funding, but we can’t allow such things to happen,” said the NEC member.

When asked for response, ANC secretary general Gwede Mantashe said he would not comment on any story written by the M&G.

Activist and director of My Vote Counts, Greg Solik, agrees that greater public funding would lead to more accountability by political parties. “It will introduce the element of transparency.”

Ivor Sarakinsky, a lecturer at the school of governance at the University of the Witwatersrand, argues against increased public funding, saying the government cannot afford it.

“With the shrinking public purse and the pressures for socioeconomic development, greater public funding for political parties, in reality, is unlikely to fly.

“The way forward is to find a way of managing private donations to political parties in a way where you do not have unintended consequences.

“You do not reduce the amount of private money flowing into politics and, at the same time, you ensure that mechanisms are in place inside parties to manage private donations more effectively.”

The NEC member said last month’s meeting mandated the party’s top six leaders to explore different options of increasing public funding for political parties and regulating private donations. The options will be discussed at one of the NEC meetings in the first quarter of next year.

The ANC has an outstanding election debt of R31-million and operational expenditure debt of R9.2-million. This is in addition to an overdraft of R30.1-million from Nedbank as of October 31 this year.  Thirty percent of the ANC’s election and operating costs – R262.4-million – was spent on salaries and wages. This year’s spending left the ANC with a net shortfall of R5.8-million. – Additional reporting by Mmanaledi Mataboge

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