Smaller political parties receive up to 300% more money from the party political fund of the Electoral Commission of SA (IEC) and will benefit greatly if the election is only held in February.
However, the ANC has already lost R35.2 million of the fund’s money because its tax affairs are in disarray.
In the current financial year, the commission is paying R162.9 million to political parties for election work.
The money is paid out quarterly and payments were made in April and last month, but each party is required to submit complete, audited financial statements of its income and expenses in the previous quarter.
The next payment will be made towards the end of October – too late to help with expenses for the October 27 election.
However, if the election is held in February – as the IEC is requesting in its application heard by the Constitutional Court on Friday – the commission will have made all four of its payments to the parties. The last payout will be made towards the end of January.
The ANC would have received R35.2 million of the money in the two quarters, but it was paid directly by the IEC to the SA Revenue Service (Sars) to pay off tax debt that the party inherited while Jacob Zuma was president and Zweli Mkhize was the party’s treasurer-general.
The new payments will dramatically benefit smaller parties such as the IFP, the African Christian Democratic Party, Cope, Good and the National Freedom Party, but the ANC, the DA and even the EFF will find it difficult to finance their election campaigns due to the limits imposed by the new law on the financing of political parties with donations.
The large, well-known parties used to be by far the largest recipients of donations, but the new law prohibits a party from receiving donations of more than R15 million a year from a South African donor and more than R5 million a year from foreign donors.
The names of everyone who donates more than R100 000 to any party must be made public.
In the past, the ANC and the DA received the most money from donations, and money from the representative party political fund has been the main source of income for most of the smaller parties.
The coming elections will therefore be the first in which voters know exactly who is financing the political party they are voting for. It will also mean that the largest parties have less money to use to campaign for votes.
“The IEC’s requirements are extremely strict. Each party may have only one bank account into which it pays all its income and in which the source of the donations must be identified. The IEC and its auditors now also have access to each party’s bank account,” said Corné Mulder, who serves on behalf of the Freedom Front Plus in a multiparty committee in the IEC.
“If the name of a donor of more than R100 000 doesn’t appear in the account, the money is immediately paid into the multiparty fund, where it’s divided equally between all 14 parties in Parliament.”
Mulder played a major role in drafting the law.
The law also requires each party to submit a quarterly audit of its revenue and expenditure to the IEC. If this is not done, the disbursements from the IEC’s multiparty fund will be withheld until the audit has been submitted and approved.
The ANC, in particular, will suffer under the new system. The party is expected to receive R69.2 million from the fund in the financial year, or R17.6 million per quarter. That is already R7.4 million less than it would have received under the previous system.
According to reports, the party had tax arrears of R80 million in April.
Febe Potgieter-Qgubule, the manager of the party’s affairs in Luthuli House, confirmed to City Press’ sister publication, Rapport, yesterday that the payments the party received in April and last month have been paid to Sars by the electoral commission.
The party has already given R25.2 million to Sars.