Political Party Funding Bill: adoption

Ad Hoc Committee on the Funding of Political Parties

28 November 2017
Chairperson: Mr V Smith (ANC)
Share this page:

Meeting Summary

Prior to adoption of the Political Party Funding Bill, the Committee went through the Bill clause by clause. The Committee had agreed to allow the IEC to utilise 10% of the Multi-Party Democracy Fund to defray expenses but following consultations with experts, the Committee determined that 10% was too generous and that the industry norm of 5% to defray expenses would be more appropriate. The Committee made an amendment that Parliament became the functionary that made regulations on when the disbursement of funds would commence. It was determined that a minimum of R1 million be held in the kitty before it was distributed to parties. Once the Committee had reviewed the Bill, it was adopted as a true reflection of the result of the processes in which the Committee had engaged.

The Committee considered its Committee Report on the Bill. Part A dealt with the review of the Public Funding of Represented Political Parties Act and the public comment received on the review. Part B dealt with the public comments on the Draft Political Party Funding Bill. Salient comments and recommendations from the public were included. Part C contained the Committee's observations and recommendations.

The first observation was that the Committee had agreed that there was a need to regulate political party funding. The second observation was that financial expenditure would be limited to setting up the new unit in the IEC and associated costs. Thirdly, was a reference to input by SALGA which believed that it was unfair that the exercise had not included the municipal level. Finally, there was an observation on the judgement of the Western Cape High Court relating to disclosure of political party funding.

The Committee recommended that Parliament approve the Bill. The second recommendation was that the IEC was to manage both funds, the Represented Political Party Fund and the proposed Multi-Party Democracy Fund. Thirdly, it was important that Parliament should pay attention to the concerns of SALGA about the needs of local government which was not within the mandate of this Committee. Lastly, the legislation was never intended to address the Western Cape High Court judgement but this legislation would be complementary to amendments to the Promotion of Access to Information Act.

The ANC Deputy Chief Whip clarified the process going forward: the Committee Report would be tabled by the Chairperson on 30 November 2017 and parties would make declarations on the report. The Bill would be introduced. Members of Parliament would have an opportunity to read and understand the Bill and the public could comment. The Bill would be debated sometime after the Budget Debate in 2018. It would then be referred to the NCOP.
 

Meeting report

Political Party Funding Bill
The Committee went through the Bill clause by clause, stopping only when a query was raised.

Mr N Singh (IFP) asked about the short title of the Bill; should it be “party” or “parties”?

Ms L Maseko (ANC) noted that it was fine as the “Political Party Funding Bill”

In Clause 1, Mr J Selfe (DA) noted that the definition of “trust” under “foreign person” had changed.

The Parliamentary Legal Advisor, Michael Prince, explained that he had added the specific Act under which trusts were registered.

Mr Selfe was concerned that some Acts had Act numbers and some did not; italics were used in some places and in other places not. It looked a little messy and he asked for consistency throughout the Bill.

The Legal Advisor explained that the intention was to indicate defined terms in italics to assist readers. For example, “the Electoral Commission Act” was in italics because it was a defined term.

Mr Selfe agreed but noticed that there was a split infinitive in the same clause and asked that it be changed to “accepts donations principally to support”.

In clause 3(6) the Chairperson noted that the Committee had agreed to make 10% of the funds available to the IEC to defray expenses. He stated that following consultation with experts he was of the opinion that 10% was too generous and that the industry norm of 5% to defray expenses would be more appropriate.

The Committee agreed.

Mr Selfe asked for an explanation of the phrase “weighted scale” in 6(3)(a).

The Chairperson explained that the equitable share would be distributed proportionally amongst the provinces, i.e. Northern Cape as the smallest legislature would receive the smallest sum. However, at provincial level, it would be distributed equitably.

Mr Selfe referred to Clause 8(3) which stated that political parties could not accept money from the proceeds of crime. In his view, it was not necessary to state the obvious and this was redundancy.

Mr Singh stated that the point was that there was an obligation to inform the IEC that money was reasonably known or suspected to have originated from the proceeds of crime.

The Chairperson suggested that he would prefer to take a cautious approach and retain the clause.

Ms Maseko agreed that it was best to leave it as it stood.

The Committee was happy with the drafting of major amendments to Clause 10.

Mr Selfe was concerned whether 1 July 2018 in Clause 25(5) was the appropriate date for the IEC to make its first disclosures. Considering the organogram that the IEC had shown the Committee, and all the processes that had to be put in place, he could not see the IEC being ready to make disclosures on 1 July 2018. It could be that they were setting up the IEC for failure.

The Chairperson agreed that the time available might be too short for the IEC, particularly as some of the issues had financial implications.

Mr Singh suggested it would be better to state that disclosure should happen "within six months" of the Act having been promulgated.

The Committee agreed.

Mr Selfe noted that Clause 26(2) stated: "Section 6(7) only comes into effect in respect of the Multi-Party Democracy Fund on a prescribed date". He read out Clause 6(7) which stated that the Commission had to pay the allocate amounts to the political parties at prescribed intervals. This meant that the IEC would make its own decision on when to pay out the funds. He did not believe that would be correct.

The Chairperson agreed but it was a difficult question as the Committee did not know when the money would be going into the IEC account or how much would be going into that account. The Committee had already decided that the IEC would require six months to set up structures. He asked the Committee for a reasonable date.

The Legal Advisor stated that the date was not determinable because they did not know when, and if, there would be money available. Only the IEC would know when money was there. Hence the drafters had determined that the IEC would have to provide that date. However, he understood that the Committee might not wish the IEC to make such a decision.

The Chairperson said that there was a need to give that IEC an indication of when the monies should be paid out. He proposed the last quarter in the 2018/9 financial year. He asked for input.

Mr Singh noted that the Committee was presuming there would be funds. The IEC had to defray expenses first when funds were received so there could be very little to disburse.

Mr Selfe stated that all he knew was that the IEC should not make the decision on when the money would be disbursed.

The Chairperson agreed that that was the guiding principle.

Mr Selfe did not think the Committee should enact the timeframe and that the Act should say that the Regulations would determine when disbursements started. In the Regulations, the Committee could prescribe that, when the fund reached a certain threshold, it had to be distributed to parties.

The Chairperson agreed that 26(2) be deleted from the Act and incorporated into the Regulations and formulated to state that the funds had to be distributed in the last quarter of 2018/19.

The Legal Advisor suggested that 26(2) could be moved to 24(5) to allow for the prescription to be incorporated in the regulations. That would change the functionary ("acting on a resolution of the National Assembly ") and Parliament would determine when disbursements would take place.

Mr N Paulsen (EFF) noted that the Schedule 1 did not stipulate from which funds a fine should be paid.

The Chairperson suggested that it was irrelevant from which funds the party would pay the fine.

Mr Paulsen wondered if a guilty party should be compelled to pay the fine before the party received any additional funds.

The Chairperson replied that the Electoral Court would make the decision about implementing the fine and the political party would have to find the money to pay it.

The Chairperson asked if the Committee was ready to adopt the Bill. With the few changes that had been made, was the Committee prepared to say that the Bill was ready?

Mr Selfe stated that the DA would reserve its position until the debate in the National Assembly.

The Chairperson explained that Members and the parties could oppose the Bill in the House, but his question was whether or not Members were satisfied that the Committee had been through the correct processes and had arrived at an appropriate Bill to present to the National Assembly.

Mr Paulson stated that his party would like to object to specific sections of the Bill.

The Chairperson repeated that parties would be able to raise the objections in the National Assembly. However, Members could not oppose the fact that the Committee had been through all the processes and had developed a Bill.

Ms Maseko proposed the adoption of the Bill.

Prof Khubisa seconded the proposal.

Ms Dlakude also seconded the proposal.

The Chairperson explained that agreeing to the proposal to adopt the Committee Bill meant that parties were agreeing that the process had been correctly handled. It did not mean that parties had to support the Bill in its entirety, or in parts. That was for when it arrived in the National Assembly.

Regulations
It was noted that the Regulations had been amended to incorporate the decisions made the previous week.

The Committee went through the Regulations.

Mr Selfe noted that the amendment to the payment of funds by the Commission had to be inserted in Regulation 5(3). He suggested that the wording should state that the Commission should disburse the funds when it reached a particular figure.

Mr Singh suggested that that figure should be R500 000.

Ms Maseko stated that the funds had to be divided between 15 parties so a figure of R1 million would be more appropriate.

The Legal Advisor noted that after the first disbursement, funds would be distributed at the intervals regulated in Clause 6(7) of the Bill.

The Chairperson agreed.

It was decided that R15 million and R5 million would be written out in words in Regulations 7 and 8.

The Regulations were accepted by the Committee.

The Chairperson noted it was not necessary to go through the Bill's Memorandum on the Objects.

Committee Report on Bill
The Chairperson reminded Members that there had been an interim Committee Report in September after the first hearings. The current Committee Report in front of them was a follow-up and included full details of the second public hearing. It was a factual report about the processes followed. Thereafter, the report included observations and then recommendations to Parliament.

The Committee went through the report page-by-page: The report introduction explained the process and noted Members of the Committee. The Committee considered its Committee Report on the Bill. Part A dealt with the review of the Public Funding of Represented Political Parties Act and the public comment received on the review. Part B dealt with the public comments on the Draft Political Party Funding Bill. Salient comments and recommendations from the public were included. Part C contained the Committee's observations and recommendations to the National Assembly.

Mr Paulsen noted that the report did not indicate the motivation for deciding that the Act should be repealed.

The Chairperson explained that it had been a joint collaboration between the National Assembly and the public, and informed by the judgement of the Western Cape High Court.

Mr Singh suggested that the wording in 3.1.1 be amended to states “agreed that the Represented Political Party Funding Act would be repealed”.

This was agreed to.

The Chairperson noted that the most salient facts from the public hearing had been included.

The Chairperson indicated that the Observations were intended to provoke discussion.

The first observation was that the Committee had agreed that there was a need to regulate political party funding. The second observation was that financial expenditure would be limited to setting up the new unit in the IEC, with the associated costs. Thirdly, was a reference to input by SALGA which believed that it was unfair that the exercise had not included the municipal level. Finally, there was an observation about the judgement of the Western Cape High Court on disclosure of political party funding.

In the Recommendations, the Committee recommended:
4.2.1     The Committee recommends that Parliament passes legislation to provide for and regulate the funding of political parties represented in national and provincial legislatures. The legislation should:
-           provide for the establishment and management of funds to fund represented political parties sufficiently;
-           prohibit certain donations made directly to represented political parties;
-           regulate disclosure of the donations accepted;
-           determine the duties of represented political parties in respect of funding;
-           provide for the powers and duties of the IEC;
-           provide for administrative fines; and
-           repeal the Public Funding of Represented Political Parties Act and provide for transitional matters.
 
4.2.2     The Committee recommends that the Represented Political Party Fund and the proposed Multi-Party Democracy Fund be managed by the IEC. The two funds should be managed by a separate business unit with its own chief executive who should report to the IEC’s accounting officer.
 
4.2.3     The Committee has noted SALGA’s proposals which its mandate does not allow it to address during this process. It recommends that Parliament pays due attention to SALGA’s concerns and proposals which are summarised in paragraph 4.1.3.
 
4.2.4     The Committee believes that the legislation it proposes will complement Parliament’s efforts to address the above-mentioned weaknesses in the PAIA legislation.

Acknowledgements were made to the political parties that had participated in the process and the input of South Africans.

The Chairperson said Members could also make any acknowledgements in the House

Approval of the Committee Report for tabling in the House was proposed by Ms D Dlakude (ANC) and seconded by Dr C Mulder (FF+).

Mr Paulsen apologised but stated that he could not endorse the Committee Report.

Conclusion
The Chairperson explained that the Committee Report would be tabled in the House on Thursday 30 November and parties could make declarations at that time.

Mr Singh assumed that all parties would be entitled to make declarations on that day.

Ms Dlakude noted that it would be the first Order on the Order Paper on Thursday 30 November 2017.

The Chairperson said that the Committee had been given the task in June and that it had met its deadline. It was up to Parliament to determine if the Committee had done a good job and whether it would ratify the Bill or throw it away or whatever. The Committee had given it its best shot and it would be up to the principals to take a decision. As Chairperson, he wanted to thank all Members of the Committee. There had been difficult times but, on the whole, the Committee had worked extremely well together.

Dr Mulder asked for clarity on the process. A document had been sent to Members the previous day about the handling of a Bill. Firstly, the Bill became part of the Committee Report and then it went immediately into a second reading of the Bill as part of the Report. Would there be declarations on the Report on Thursday and would the House go straight into the second reading of the Bill?

Ms Dlakude explained that the Committee Report would be tabled by the Chairperson and declarations would be made on the Report. Parliament was not going to waiver the three-day rule. The Bill would be introduced for the second reading. The Bill would then be ATC’d for Members of Parliament to read and understand it and for public comment. The Bill would be debated after the Budget in 2018. Then it would be referred to the NCOP and tagged. The process of tagging would commence on Thursday.

The Chairperson noted that the Bill would only be debated in 2018.

Ms Maseko thanked the Chairperson, on behalf of the Committee, for steering the ship and getting the Committee to the position where they had a completed Bill. She thanked the support staff and legal team. She thanked South Africans for their comments and engagement.

The Chairperson thanked Prof Halton Cheadle and the University of Cape Town, for his invaluable assistance in the preparation of the Bill.

Minutes of the 3, 7, 8, 10, 21 and 23 November 2017 were adopted.

Meeting adjourned.

 

Share this page: