Political Party Funding Motion: deliberations

Meeting report

The Chairperson apologised for starting five minutes late due to connectivity issues.

He welcomed everyone to the meeting.

The Committee had received oral submissions on the political party funding the previous day. The IEC and the Parliamentary Budget Office (PBO) had raised issues that the Committee had to consider. The PBO said it could not clearly articulate how the Fifth Parliament determined the R15m upper limit. The IEC articulated that Parliament initiated the process. The attitude of most of the presenters was to consider shifting the current status quo with the amounts that are being raised or other issues relating to…

[There were connectivity issues].

The Chairperson said that the National Treasury's absence from the previous day’s meeting made it difficult for the Committee to benefit from the subject matter. Most of the presentations also indicated that further study or consideration should be given to these matters so that there is a legitimate reason for the amounts to be altered or read in by the courts.

The Committee cannot table the matter before Parliament since the NA House is rising this Thursday. The matter will be tabled during the first committee meeting in the next term. He proposed that during this time, the National Treasury and the PBO go and do further work. This will help find a justifiable reason for increasing, lowering or retaining amounts. This would be an important area for the Committee to consider. This will also assist the IEC with comprehensive details once further work is completed by the National Treasury and the PBO. The Electoral Reform Consultation Panel is currently engaged regarding the electoral system. Moving forward, there might be an impact on the funding, so this must be considered. It may assist the Committee by allowing the National Treasury and the PBO to do further work to find a justifiable reason.

The Committee listened to all the views expressed during the oral submissions. It may appear that, in principle, there is a need to reconsider the increase in the threshold of donations. However, this matter will be deliberated on when the Committee receives a comprehensive report or further work from the National Treasury and the PBO. He wanted to table this matter with the Committee so there could be a proper way forward. A letter will be sent to the Speaker of the National Assembly regarding why the deliberation had to be rescheduled. This will include the fact that the Committee requested further work to be done because it was indicated that the PBO could not confirm the reasons for the amounts determined in the Fifth Parliament. This will assist the Committee to determine which tools were used to arrive at the amounts. He said the cost implications and what is needed for an organisation to function should also be considered. These are some of the issues that would be important for the Committee to deal with. Some views expressed the need to remove the section completely. The Congress of South African Trade Union and other organisations also expressed some views. However, these are some issues that the Committee will grapple with during the deliberations. The principle is to open up for more work by two institutions and then come back with a comprehensive response to the Committee. He invited the Members for comments and noted that the courts must still decide, as raised by My Vote Counts (MVC).

Discussion

Mr A Roos (DA) agreed with the Chairperson’s proposed approach. He said that the Committee should consider two separate issues here. The first is to amend the amount or retain the amount. Essentially, there is a R15m upper limit baseline and a threshold of R100 000. The Political Funding Act (PPFA) provides a guide that three factors need to be considered when these amounts are to be amended by the President. The first factor is the amount previously appropriated by acts of Parliament from the party funds. In one of the submissions received, there was an exception in one year, where a large amount was transferred ahead of the elections. If one looks at normal operations in the mid-term periods, those amounts increase by about 5%. This points to inflation targets. The second factor is the value of money over time, the cost associated with participating as a political party. He said that some of the data that had been collected has shown that it costs about R15m to get a seat in Parliament. So, one does need to look at how many seats popped up. He mentioned the R21m as indicated by the PBO and said it could be in that range if inflation is calculated in. The threshold should by now be around R143 000 if inflation is calculated in. He agreed it would be best for the PBO and the IEC to look at this more carefully, especially around costs associated with participating as a political party. The third factor is the overall review of whether the PPFA achieves its purpose. This is a bit of a longer project. However, he agreed with the National Treasury and the PBO doing more research. A short-term decision has to be taken, and it will support the in-depth review. There is a lot of information and inputs that can inform better decisions.

Ms L Ngobeni (Action SA) agreed with the Chairperson’s sentiments. Action SA’s view is that the thresholds need to be reconsidered. Since South Africa decided to be a multi-party democracy, having the current threshold does not make sense. It muzzles new political parties that may be coming into play. This does not mean that there should not be accountability. What happens is that the thresholds currently in play mean that people can manipulate the system in a way they want to. There are a lot of people and organisations who do not want to be exposed. For the sake of transparency, these thresholds need to be reconsidered because they muzzle out the affectability of political parties in the system to be able to participate. The thresholds must be reviewed. The thresholds must be increased and not lowered. If it is lowered, it will not be feasible for political parties. If the threshold is lowered, it will find itself more in administering a lower threshold than actually utilising it. It will become redundant. If the thresholds are lowered, it will not be good for transparency. It will not be cost-effective for political parties to take the current thresholds. The Action SA is seeking the review and making the thresholds much higher. Anything below R500 000 is not feasible, particularly for emerging political parties. The written format of this had been submitted to the IEC.

Ms M Modise-Mpya (ANC) agreed with the guidance and proposed approach. More work and more detail to be done will empower the Committee to deliberate on the issues and ultimately reach a consensus regarding the resolution to increase or lower the threshold. She raised her hand to support the proposed approach. This approach will allow the Committee to deliberate when all the reports and details have been put together.

The Chairperson asked Mr Mathonsi whether there was any other hand.

Mr Mathonsi said that there was no other hand.

The Chairperson asked if the Parliamentary Legal Services wanted to say anything on the Committee’s decision.

Ms Telana Halley-Starkey, Parliamentary Legal Advisor, Constitutional and Legal Services Office, said that there are no legal implications for the suggested way forward. Nothing stops the Committee from applying its mind and asking for further research. In the MVC NPC matter with the Western Cape High Court dated 16 August 2024, it was pronounced that the thresholds would be R100 000 and R15m for the upper limit. This is in place until the President makes a determination based on a resolution of the National Assembly. A separate matter will be heard in the High Court on 17 or 18 February. This matter deals with the thresholds of whether it is constitutional or whether the section itself is constitutional. The High Court’s determination will change that. However, an interim measure of the R100 000 threshold and R15m upper limit exists. There is no real rush to make a hasty decision. It is very important that this is done. However, this decision should be made when the Committee has enough confidence to make a decision. There is nothing untoward if the Committee wants to apply its mind first.

The Chairperson asked whether the PBO had anything to say.

Mr Mathonsi said a link was sent to the PBO, but it does not look like they attended this meeting. However, a letter will be written to the PBO.

The Chairperson asked whether the IEC had anything to say.

Mr George Mahlangu, Chief Executive: Political Party Funding, IEC, said it will work with the National Treasury and the PBO as requested.

The Chairperson noted that the IEC was firm that they did not have a position on the proposed amounts, including other issues raised in the previous meeting. He thanked the IEC for attending the meeting.

Closing remarks

The Chairperson said that this was the Committee’s decision. The Committee will communicate this to the Speaker of the National Assembly regarding more work being done by the National Treasury and the PBO. During the first meeting in the new term, the Committee will receive these reports and deliberate.

He reminded Mr Mathonsi to schedule deliberation immediately after the briefing from the National Treasury and the IEC. This will allow the Committee to submit a draft resolution to Parliament. He asked if there was any other matter.

Mr Mathonsi said that this was the only item on the agenda.

The Chairperson thanked everyone for attending the meeting.

The meeting was adjourned.