Additional NPC Documents

Additional discussion documents: POLITICAL FUNDING AND ANC FINANCIAL SUSTAINABILITY

organisational renewal discussion document, an expansion of public funding would need to be firmly grounded within certain principles. Increased public funding should be seen as part of our programme to strengthen democ racy, build transparency and accountability and ensure that all political parties achieve financial sustainability in a manner that is transparent, ethical, lawful and predictable. 49. Seen in this light, there are three principles of a new party-funding model that cannot be separated. These are: a) Enhanced public funding for activities that promote and support democracy b) Regulation of private financing of political parties c) Financial transparency of political parties. 50. Enhanced public funding for activities that promote and support democracy should be focussed on supporting voter, political and citizenship education, as well as on policy development. This could be achieved, for instance, by directly funding party-sponsored political foundations or policy institutes. It is important that, in addition to ensuring value for money in terms of enhancing the quality of democracy, public funding should not be biased in favour of entrenched positions. This implies a trade-off between proportionality and coverage, and means the provision of additional resources to smaller political forces and new political initiatives. 51. Currently, the level of public funding does not cover all the political party activities. This leads to an over-reliance on private dona tions, especially to fund election campaigns. But, compared to most other democratic countries, private financing of political parties is largely unregulated in South Africa. This fu els the perception that anonymous donations from business interests are a means to sub vert democratic processes by influencing the awarding of contracts or framing of policy in a manner which advantages private interests, dilutes the voice of the masses and under mines the constitution. 52. Disclosure rules would require all private donations above a certain amount to be dis closed either to the public or a trustworthy and legitimate official body. Such rules can be a key mechanism in confronting conflicts of interest and improper influence on parties or candidates. On the other hand, concerns may

be raised that disclosure would negatively affect opposition parties, with large donors worried that their position with the party of government could be undermined. 53. A second issue for regulation is the exclusion of certain donors. Many countries outlaw do nations from certain types of donors, including public or private sector companies or foreign donations. Several also prohibit foreign fund ing, either from public sources or multination al corporations. Donations for companies that are fully or partially owned by government may be a worthwhile exclusion. We should also consider extending this restriction to companies that do substantial business with government. In Chile for example donations from companies for whom public tenders and contracts account for a significant proportion annual turnover are restricted. The exclusion of donations from certain sectors or economic activities may also be considered (e.g. the gambling or alcoholic beverage industries). 54. Perceptions of undue influence and corrup tion are further fuelled by the absence of financial transparency amongst political par ties. Unlike other institutions of the democrat ic order, parties are not required to disclose or report publicly on either the sources of their finances or the uses to which funds are put. A clandestine approach to both the sources and uses of money creates an atmosphere of sus picion and mistrust. It creates fertile ground for corruption, waste and inefficiency and makes it difficult for party members to plan financially and organisationally. 55. This in turn results in a hand-to-mouth exis tence that does not recognize financial con straints and makes parties vulnerable to dubi ous sources of income. The consequences are profoundly destabilising, not only for the parties themselves but for the democratic order as a whole. Lack of transparency is the mother of financial uncertainty and as correct ly noted in the ANC’s organisational renewal document “unless we crack the perennial uncertainty about the ANC’s financial position, the strategic perspective and posture that the ANC is a strategic centre of power will remain meaningless.” 56. Thus, increased public funding should be conditional on measures that regulate the private financing of political parties and also require an exemplary level of party financial

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