Political Party Funding Act sends donors running

After more than two years of litigation and campaigning by non-profit organization My Vote Counts, the new Political Party Funding Act (PPFA) finally came into effect on 1 April this year . The implementation of the PPFA is a great stride towards a transparent and accountable political system. The upcoming local government election will be the first where voters have critical information about who is funding political parties.

 

PPFA funding disclosure rules

The Act regulates the disclosure of donations to political parties. All political parties must disclose donations above R100 000 (in cash or kind e.g. transport or catering) to the Electoral Commission on a  quarterly basis. 

In addition, the Act places restrictions on who is allowed to donate to political parties: organs of state, state owned enterprises, foreign governments, and foreign government agencies are all prohibited from donating to political parties. 

But will political parties comply? The PPFA gives the Electoral Commission the responsibility of monitoring the compliance of political parties and the power to impose fines and suspend or withhold payments from political parties. 

 

Purpose of PPFA

The implementation of the PPFA was a historic development in promoting the right to access information. Information on political party funding can help voters to identify which parties accept donations from individuals or organisations whose motives may not be entirely virtuous.

The implementation of the PPFA is crucial in advancing much-needed transparency in South Africa’s political landscape, including its electoral processes. The Act makes crucial information available to the public, allowing voters to make more informed decisions when it comes to voting. The PPFA can be seen as a stepping stone in rebuilding confidence that has been lost in the government. This loss of confidence has led to voter apathy and lower turnout in recent elections. 

 

PPFA leads to financial woes for political parties ahead of the municipal election

The increased scrutiny of donors has already damaged the coffers of some political parties. At a media briefing on May 11, Jessie Duarte, ANC deputy secretary-general, stated that the party’s traditional funders had stepped back. The ANC’s long-standing financial problems may be exacerbated by the PPFA and Duarte also noted that it appears that some donors are wary about their identities being disclosed.

 

What does the future hold? 

Innovation has been long necessary for new political parties, with ActionSA showing an impressive social media presence, the established parties now have time to not only  reflect on their policies but also learn from the ingenuity of new and smaller parties.  

As donor income becomes inconsistent for political parties, it is clear that in order to not lose steam ahead of the upcoming municipal elections, parties might have to develop alternative fundraising methods to fund internal party campaigns. The impact of the PPFA on campaigning strategies, deterring donors and influencing voters’ decisions can only be seen after voters have taken to the polls. 

The IEC published the first report on political party funding on 9 September 2021. The ANC, DA and Action SA made disclosures in compliance with the Act, these were the only parties to do so. While there are 504 registered political parties, it was reported that 108 parties stated that they did not receive funding exceeding the R100 000 benchmark and 393 parties simply did not comply with the regulation. 

It is concerning that certain political parties did not make any disclosures and it is vital that the IEC is able to ensure compliance with the Act’s requirements. There are criticisms that the IEC has not indicated whether it will sanction non-compliant political parties. As the nation prepares for the local government elections, one hopes that the IEC is prepared to robustly exercise its oversight of recalcitrant political parties.

Written by Yolanda Mpinana

September 23, 2021

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