Is it time for South Africa to look at imposing spending caps on political party election campaigns?
Political funding was once a murky world of donations, where money flowed freely and opaquely from private donors into party coffers. Voters were none the wiser about the source of cash to their preferred party — and all the major parties wanted to keep it that way.
Then in 2021 the Political Party Funding Act came into force. It compels parties, in theory, to disclose all donations — in cash and kind — above a threshold of R100,000. Donations from single donors were capped at R15m. Administration is the job of the Electoral Commission of South Africa (IEC).
The law also bans cash donations from foreign entities, and it changed the formula for the distribution of state donations to parties in parliament.
President Cyril Ramaphosa was praised for ushering in a new era of transparency and accountability for political parties. It was felt that voters could make their choices based not only on the attraction of party policies, but also on the calibre (high or low) of donors.
Unfortunately, it has not delivered the promised golden age of party funding transparency.
The issue remains fraught with difficulty and, importantly, pushback from parties.
For instance, the MK Party — the third-largest party in parliament — has declared donations only once since its formation; the EFF is another hesitant participant.
Declarations are required every quarter.
IEC chief electoral officer Sy Mamabolo says while there have been few declarations from MK and the EFF, there is an opportunity for their finances to be scrutinised through the tabling of their financial report, also required.
Ramaphosa displayed latent signs of buyer’s remorse after he first signed up for funding transparency, by assenting to regulations that effectively lifted the threshold on party disclosures just in time for the hotly contested 2024 general elections. In effect, for a short time, there was no threshold in place — a move that was challenged in court, which reinstated the limits two months after the poll.
Now parliament is looking at doubling the thresholds originally set to R200,000 and R30m, which advocacy group My Vote Counts argues is counterproductive to party funding transparency.
A political party funding symposium organised by the IEC this week is being held to assess the efficiency of the South African system, and to explore global trends in funding and transparency and potential suggestions on improving the local system.
Mamabolo says there are jurisdictions that deepen transparency and bolster democratic participation through managing or regulating not only the income side of party funding but also the spending side. “It’s one way of regulating party funding. Our parliament decided — consciously, I believe — that you need to disclose income rather than cap expenditure.”
This is among the questions the symposium will grapple with this week.
Importantly, it could reduce the use of state resources for political party campaigns
What would capping the spending side mean? It would have consequences for parties that hold mass rallies and provide meals, T-shirts and the like for those who attend — and for those who hold lavish gala dinners where business leaders pay exorbitantly to be wined and dined at the tables of top political leaders.
Capping expenditure could level the playing field between large and small parties, which would all be forced to contend on the strength of their policies and the quality of their leaders, instead of the number of people they can entice with food parcels and access.
Importantly, it could reduce the use of state resources for political party campaigns.
In 2017 the Public Affairs Research Institute recommended that spending on campaigns should be restricted and be coupled with funder-side disclosures. In February this year, the parliamentary budget office (PBO) proposed spending caps on campaigns, saying this would be as important as limiting private donations in promoting transparency and protecting democracy.
“Our analysis has revealed that 68 countries impose spending limits, more so during election periods, presenting an opportunity for South Africa to enhance democratic transparency,” the PBO says in a presentation to parliament.
“Leading democracies demonstrate the effectiveness of spending caps in reducing financial disparities and ensuring electoral fairness. Political spending caps can reduce the influence of wealthy donors and corporations, promoting a more equitable electoral process where smaller parties have a fairer chance to compete and share their policy platforms without being overwhelmed by massive campaign budgets.”
Importantly, says the PBO, “spending limits can help mitigate potential corruption by reducing the financial incentives for political patronage and limiting the ability of economically powerful groups to disproportionately shape political narratives and policy decisions”.
Canada, South Korea, the US, India, the UK, Tanzania and Brazil all have spending caps in place, which can reduce the influence of wealthy single donors.
South African political parties have already effectively sidestepped this option, but it is worth serious consideration as another side of the political party funding transparency coin.
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