ANC seeks taxpayer millions as private funders close taps
The cash-strapped ANC is looking to the taxpayer to fork out hundreds of millions of rands extra to bankroll political parties, as looming strict new funding rules and recent high-profile funding scandals have seen some private donors close the tap.
If the party’s treasurer-general, Paul Mashatile, has his way, the funds the state allocates to political parties could increase from R164m to more than R500m a year.
The ANC and other parties would have to convince finance minister Tito Mboweni to dig deep in the public purse to find additional funds in the face of dwindling revenue, competing priorities, and budget cuts across the board.
Mboweni told the Sunday Times he was open to holding discussions with political parties about increasing their grants.
“A democracy that cannot support itself runs the risk of being captured by outside donors,” he said.
“For the integrity and sanctity of our political system we have to pay for our democracy. To that extent, I look forward to a conversation with all political parties about how we can go about funding them.
“It is a legitimate issue. I don’t think it’s proper for our political parties to be funded by donors in the Middle East or wherever. We should fund our own political parties in defence of our democracy and political party system — but within fiscal constraints.”
The ANC has on two occasions this year struggled to pay employees on time. Mashatile said this was due to the reluctance of private business to donate to the governing party due to new disclosure laws, and that some businesses were struggling during the national lockdown.
He told the Sunday Times that in addition to demanding more funding from the state, the party wants to make changes to the Political Party Funding Act to remove “constraints” that threaten the financial survival of political parties represented in parliament. The act has been signed by President Cyril Ramaphosa but is yet to come into effect.
“Since the president signed the act we have found it very difficult to fundraise from the private sector,” Mashatile said.
“There are many private companies that don’t want to be disclosed. That is why at the moment we don’t disclose who is funding us. [The act] has created a very difficult environment for fundraising.
“Once the act comes into play we are going to have to disclose all our funders. I’ll have to see at that point what happens because there may be those who may not run away, but others may decide to pull out.
“My sense is that you are going to see a great reluctance to fund political parties. Therefore it’s good for government to fund political parties. It’s good for democracy. That’s my view. It’s not a bad thing. It’s done all over the world. I’ve been to Germany … a lot of political party funding comes from the state.”
The funding of political parties came under the microscope last week following revelations that corruption-accused Gauteng businessman Edwin Sodi had donated millions to the ANC and given money to party leaders.
Before then, former Bosasa COO Angelo Agrizzi had revealed how the company had made generous donations to the party and splurged on its leaders.
Mashatile said the party did not scrutinise its funders and only rejected money from state companies or that obtained through criminal acts.
He said a court was yet to determine if Sodi’s money had been obtained illegally.
The act was crafted to bring transparency to the funding of political parties. The bill also prohibits political parties from receiving funding from foreign governments and their agencies.
Mashatile said the party wants the act to go back to parliament to “re-look” at the limitations that will be introduced by the act. The limitations that Mashatile says the ANC wants amended are:
The R15m cap on donations that parties are allowed to receive from private donors each year;
The R5m cap on foreign donations for training and research each year; and
That names of funders who donate R100,000 or more be disclosed.
“From our side as the ANC we have raised some issues that we want parliament to relook at. One of them, for instance, is that the act puts a limit on the amount you can raise from the private sector.
“I think it’s R15m a year, which we think is a bit of a challenge because as political parties we need a lot of funding, particularly during elections.
“Secondly, the disclosure amounts are very low in our view as the ANC. The act requires that any donation [of] R100,000 [and above] be disclosed.
“The third one is the issue of foreign funding. We don’t have a problem with the act saying political parties must not be funded by foreign governments etcetera. The act says you can get foreign funding for research
and training and so on.
“But even with that, they have put a limit of R5m a year, which we think is very low because when you do training and research, you might need more funding. So there are those constraints that we have raised.”
The act is back in parliament to deal with a technicality that deals with intervals at which parties receive payments from the Independent Electoral Commission (IEC).
IEC head of party funding George Mahlangu said presidential regulations had “erroneously” regulated what was supposed to be regulated by the IEC.
He said MPs would have to correct that error, but could not amend the act in the way proposed by Mashatile.
“They can’t bring something else. This regulation is not for amendment because someone is not happy,” said Mahlangu.
Home affairs minister Aaron Motsoaledi’s spokesperson, Siya Qoza, said the minister had already written to the National Assembly to consider the presidential regulations.
The ANC has almost 400 employees across the country.
Mashatile would not say how much it costs to run the party. However, he revealed that the current funding from the government accounted for only 18% of the party’s expenses. Contributions from public representatives and membership fees accounted for 12%, and donations from private funders contributed 70%.
“If political funding is not increased it means political parties rely on the private sector to exist. That’s really the biggest challenge at themoment. We’re calling for an increase in party funding so that political parties are not held to private interests or pressured by the public sector because people contribute to the party.
“We want the party to be freed from the private sector. As things are in SA, contribution to political parties is very low. All political parties are not satisfied — R164m, it has not increased in the last 10 years.”
Asked if the party would propose that R500m be allocated to political parties a year, Mashatile said: “My view is that more [should be allocated]. But obviously government can do that incrementally, depending on what the challenges are. They may as well say we move from R164m to R400m or R500m. As I said, during elections R500m is [the] expenditure of one party.
“It means even if government funds us with what they consider sufficient, it may not be. It means we’re going to continue to fundraise. I would like a situation where that ratio reduces from 18% government and 70% private sector … to become 50/50. But too much reliance on the private sector for political parties is not good.”
Although the ANC was struggling to make ends meet, Mashatile said the party had decided not to retrench workers. However, it has frozen all posts throughout the country.
“But we have looked at right-sizing our structure. Some of the people who are older, we will allow them to retire ... except politicians, of course.”
It is a legitimate issue. I don’t think it’s proper for our parties to be funded by donors in the Middle East or wherever
Tito Mboweni
Finance minister