6 questions about the new Party Funding Act answered

2019-01-23 18:12

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President Cyril Ramaphosa this week signed into law the Political Party Funding Bill which determines that all private donations to political parties must be disclosed. How does this change the face of political party funding? Here are six of your questions answered.

What is the Political Party Funding Act?

The Political Party Funding Bill, which has been passed by Parliament and signed by Ramaphosa is viewed as a step that will improve transparency of party funding. Until now, political parties have never been required to disclose the sources and amounts of the donations that they receive from private donors. The bill, now an Act of Parliament, determines that parties must report this information to the Independent Electoral Commission (IEC), which will publish the information on a quarterly basis.

What exactly does the act say?

Section 9 of the act states that "political party must disclose to the [Electoral] Commission all donations received — (a) above the prescribed threshold; and (b) in the prescribed form and manner".

Section 10 states that "no person or entity may deliver a donation to a member of a political party other than for party political purposes" and a member of a political party may only receive such a donation "on behalf of the party".

The act also states that a party may not accept a donation "that it knows or ought reasonably to have known, or suspected, originates from the proceeds of crime and must report that knowledge or suspicion to the [Electoral] Commission".

What is the maximum amount that does not have to be declared?

In terms of the act, a donation of less than R100 000 doesn't need to be declared and there is a cap of R15m that one person can donate to a party per year.

What are some of the concerns about disclosing private donors and how are they being addressed?

One of the initial concerns over disclosing the names of private donors was that legitimate donors who might want to remain anonymous would be dissuaded from donating, making it more difficult for parties to raise funds. To offset this complication, a new Multiparty Democracy Fund has been created.

This fund will receive donations anonymously, as well as from people who do not want to donate funds to any particular party. Each party represented in the National Assembly and provincial legislatures will then get a portion of these funds calculated with a formula based on the proportion of seats they hold in the respective legislatures. The fund will also be administered by the IEC. 

Would the act also govern internal party leadership campaigns?

The act is entirely quiet on payments for internal leadership campaigns, but according to Janine Ogle, national co-ordinator of the organisation My Vote Counts, this type of payment holds the same dangers in terms of transparency and accountability, Jan Gerber reports.

"The danger of secret party funding is not different to the dangers of payments to leaders of political parties," Ogle said.

She said there was no way of knowing if the donors would have influence over the political leader.

What would be the punishment for parties who contravene the act, once promulgated?

Punishment for contraventions of the act can be a fine of up to R1m or 30% of the party's income, whichever is highest.

Read more on:    iec  |  parliament
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