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Parties strain against Funding Act

The recently praised Political Party Funding Act has significantly affected the fundraising efforts of political parties, with both the ANC and Democratic Alliance (DA) calling for a review of the new law.

READ MORE: Anxiety grows over party funding Bill

This week the ANC’s treasurer general, Paul Mashatile, called for the law to be reviewed during the sixth administration.

DA chief executive Paul Boughey expressed a similar sentiment when fundraising before the 2019 elections proved difficult, in part because of the new law.

The parties experienced difficulties raising funds in the run-up to the general elections billed as the most crucial since 1994, fighting not only a weak economic climate but a toxic business environment, in which the private sector has become entangled in allegations of corruption and state capture.

Political party funding has historically been contentious, but the state capture years have perhaps exacerbated this — particularly after the harrowing revelations before the state capture commission of inquiry about donations to the ANC from controversial services company Bosasa.

READ MORE: Bosasa, the scandal the ANC can’t spin

ANC leaders from three provinces have also complained about a shortage of resources such as transport and T-shirts. This week, the ANC in the Western Cape issued a statement saying it was returning a donation by businessman Iqbal Survé — which was publicly made — because the party belatedly realised the donor was implicated in wrongdoing before the Public Investment Corporation commission of inquiry. Yet in a statement, Survé said there had been no formal communication from the party in the province indicating that the money would be returned and that he was told the money had already been distributed to regions in the province.

President Cyril Ramaphosa signed the Bill into law in January, despite misgivings among the larger parties.

At the time, the ANC welcomed the move: “The ANC has consistently supported the principle of regulating funding for political parties. We view this as an important milestone in strengthening our democracy and enhancing transparency as a cornerstone of our democracy.”

The Bill says individuals cannot donate more than R15-million each year, while donations for less than R100000 do not need to be declared.

The country’s two largest parties seldom agree, but both felt the pinch of the new legislation, even though it was enacted but not implemented in time for this election.

“It has made party funding much more difficult and complex and it is going to be even more so in 2021 when the full regulation will be in force,” Boughey said.

Mashatile said it was a good thing that the regulations had not yet taken effect, because this provided an opportunity to “review” the law, with a view to addressing some of the challenges brought about by its enactment.

“At the moment, it seems like a lot of obstacles may accompany the implementation of that law,” he said.

“Many parties were worried, it was not just the ANC. There are limits [in the law] to how many donations parties can receive in a year. My view is that [during] the sixth Parliament, we should use the opportunity to relook the legislation so that it can allow parties to fundraise and really operate smoothly,” he said.

“So yes, some of those things are quite stringent.” Boughey said whereas the DA had always “in principle” supported transparency in political party funding, it has made it clear that it was concerned over the new law.

“Now in practice this has proven to be true, that a lot of potential donors who are well-meaning South Africans who want to support multiparty democracy … are now concerned about possible victimisation by the governing party through the form of tenders or even South African Revenue Service audits,” Boughey said.

He warned that the legislation might have the effect of entrenching the two or three largest parties and squeezing out smaller ones.

“So parties that suffer the most are potentially the smaller ones, which, from the DA’s perspective, is not the end of the world, but for South Africa’s democracy, it is.”

He said that although the intent behind the legislation was “intuitively good”, in a society like South Africa, where endemic corruption was pervasive, punitive measures such as those in the legislation were “dangerous”.

Civil society had welcomed the enactment of the legislation after a long-running battle to ensure that party funding was more transparent. Civil society group My Vote Counts could not be reached for comment, but it recently expressed disappointment that the law had not taken effect in time for these elections.

“The extent to which the unregulated funding of political parties has undermined our democracy and provided a fertile ground for corruption on a grand scale continues to be exposed at the Zondo commission of inquiry and in media reports,” the organisation said in a statement.

“Political parties must take steps to re-establish trust and faith in the political and electoral system. Transparency in relation to the sources of their significant private funding is a crucial element of this process.”

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Natasha Marrian
Natasha Marrian
Marrian has built a reputation as an astute political journalist, investigative reporter and commentator. Until recently she led the political team at Business Day where she also produced a widely read column that provided insight into the political spectacle of the week.

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