Picture: Henk Kruger/African News Agency (ANA)
Picture: Henk Kruger/African News Agency (ANA)

IEC to implement Political Party Funding Act ahead of local elections

By Zintle Mahlati Time of article published Mar 17, 2021

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With the Political Funding Act expected to come into effect on April 1, the first quarterly report on political funding donations is expected to be presented before South Africans head to the polls to vote in the local government elections.

The IEC on Wednesday thrashed out finer details of how the Act will govern what many hope will mark the beginning of greater transparency in who funds political parties.

The Act was signed by President Cyril Ramaphosa last year.

The IEC had to set-up a mechanism of conducting its new powers and administrative duties to ensure the act is adhered to.

IEC commissioner Janet Love said the Act is one of the biggest legislative changes to come into effect since democracy.

She said the act requires transparency and requires that political parties disclose donations made to their organisations every quarter.

As the Act comes into effect on April 1, the first reporting to the commission is expected by June.

The IEC has had to create a political funding branch to deal with the legislative requirements. This unit is headed up by George Mahlangu.

What the act will mean for SA's political parties?

The Act will see two funds established, the new fund is the Multi-party Democracy Fund. This fund will receive money from private donations whether in or outside the country. The commission may not receive any money through this fund from foreign organs of state, state-owned enterprises and proceeds of crime.

Mahlangu explained that this fund can be used as an avenue for private donors who wish to donate towards political parties in general and not one individual party. Donors would be allowed to apply to the commission not to publicly disclose their identity.

Another fund that existed before, the Represented Political Party Fund, will see minor changes to how its administered.

The money in this fund is distributed by the IEC to political parties on a proportional basis/equal share system.

This was previously 90% proportional depending on the number of seats the part has, and 10% was an equal share.

The changes to fund will mean that smaller political parties will receive the biggest benefit as the IEC will now have to distribute funds based on 67% proportional and 33%equitable allocation.

Political parties will be limited in what they can spend the money from the two funds on.

The disclosure part of the act will require political parties to disclose to the IEC donations above R100 000 and limited to R15 million in a financial year.

The responsibility for disclosure will also lie with the donor as they will also need to disclose these donations to the IEC.

The IEC will need to publish information on the donations quarterly to Parliament and on a publicly accessible website.

Political parties will hold the greatest responsibility of transparency, Mahlangu said. They will be required to keep records of financial donations, appoint an accounting officer to keep track of these records and also for the appointment of an audit firm to assess this documentation.

The IEC said the online reporting system to be used by political parties has been finalised and that the needed training as been observed.

Commissioner Love admitted that the commission will have a huge task ahead as the finer details of the act become clear over the coming months.

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Political Bureau

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