Additional NPC Documents

Additional discussion documents: POLITICAL FUNDING AND ANC FINANCIAL SUSTAINABILITY

interest principles as public embarrassment this can cause, especially during election pe riods. 65. Party-linked vehicles could create similar problems. In addition, they could typically involve the diversion of significant shares of profits into the pockets of private individuals and into the war chests of emergent factions. At provincial and local level, they can gener ate significant factional instability. Such com panies should not be created. 66. Companies sympathetic to the ANC, however, should not be discouraged from making open, transparent and legal donations. Dedicated ANC cadres working in the business sector, moreover, should not be discouraged from contributing to the movement. Indeed they should feel obligated to make open and trans parent donations of an appropriate size to an appropriate structure. 67. New integrity mechanisms will be required to ensure that conflicts of interests are managed and that the ability of cadres to do business with the state is not abused. Changes to gov ernment procurement systems will reinforce the positive impacts of these reforms. of political parties in South Africa. Increased public funding should be seen as part of a pro gramme to strengthen democracy, combat cor ruption, build transparency and accountability and ensure that all political parties achieve fi nancial sustainability in a manner that is trans parent, ethical, lawful and predictable. 69. A new party-funding model should be founded on three principles: a) Enhanced public funding for activities that promote and support democracy b) Full financial transparency of political parties. c) Regulation of private financing of political parties 70. It is recommended that increased public fund ing should be considered in the following framework: i. Stronger financing for party policy insti tutes, educational activities and opera tional spending: Increased public fund PROPOSALS AND RECOMMENDATIONS 68. There is a need for greater public funding

ing should be directed towards those activities that support democracy and enhance citizen participation in politics. This means that funding should support policy development, political education and voter education activities between elections. In particular, more funding for party operational/ administrative activi ties and party sponsored political insti tutes should be considered. This would be supported by greater allocations to parties from the fiscus and also be a re allocation of funds from party caucuses to these activities. Financial transparency of political par ties: Public allocations should go only to those parties that publish audited financial statements on an annual basis subject to the oversight of the auditor general. These financial statements should cover expenditure and the use of funds for all the activities of the party and subsidiary bodies, whether financed by the public funds or other sources. (The income side of the audit would be subject to the disclosure regime proposed in rec ommendation iii below). This would mean that political parties become subject to provisions that ordinarily face other pub lic institutions in a democratic society. Funding should be withheld from parties that fail to comply with these provisions. Strong regulation of private financing: Enhanced public support should be intro duced at the same time as comprehen sive legislation that regulates private fi nancing of political parties. In other words, a single Act should cover public funding, private donations and party financial transparency. This should include clear rules on the identification of donors and the size and type of funding they provide. Funding of parties ordinary operational costs by local private donors or from for eign sources should be outlawed (as this would be covered by enhanced public funding). Foreign funding should be lim ited to non-profit institutions and be for the benefit of all parties. Donations from pub lic companies or from companies whose business is substantially with the govern ment should also be prohibited. Allocating funds to promote democracy:

ii.

iii.

iv.

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