BUSINESS NEWS - An additional R1.1 billion in funding will be made available to political parties over the Medium-Term Expenditure Framework (MTEF), says Finance Minister Enoch Godongwana.

“Over the MTEF, an additional R1.1 billion in funding will be made available to political parties. Mindful of next year’s Local Government Elections, however, we are considering availing even further funding,” Godongwana said on Thursday.

The Minister was speaking at the Electoral Commission’s (IEC) Political Party Funding Symposium underway in Durban.

In his address, the Minister said the performance of the economy and the lower revenue collection, presents serious challenges, which "may hinder the implementation of a common funding pool for political contestants supported by the fiscus”.

“In addition to the allocations to the IEC, from 2011/12 to date, funding of R3 billion has been provided to political parties to provide a baseline of public funding to help smaller or newer parties compete more effectively against well-established and privately funded ones," the Minister said.

Godongwana said a young democracy like South Africa relies on strong and independent institutions for its longevity and legitimacy.

“These institutions are key to maintaining the checks and balances that are the backbone of any democracy.”

Godongwana said another equally important component is competitive elections by political parties that are not beholden to private interests and should therefore be publicly funded.

“Political funding in South Africa has historically been opaque, with little regulation or public disclosure until recent years,” he said, adding that for much of the democratic era, political parties were not legally required to reveal their sources of private funding. 

"This raised concern about corruption, undue influence, and lack of accountability.

“This fundamentally shifted with the Political Party Funding Act (PPFA) of 2018, which came into effect on 1 April, 2021.”

The Minister said despite these advances, challenges remain in enforcement, local transparency and curbing illicit financing.

“The implementation of the PPFA has in some measure led to a significant drop in private funding for many political parties, making it challenging for them to meet operational costs. There are other pitfalls to the PPFA that we must be honest about and work hard to overcome.

“Another challenge is that currently, the political party funding legislation does not extend to local government level. This is an area that we must address.

“As National Treasury and government as a whole, we must commit to improving transparency and oversight of political finance to prevent abuse by illicit networks.”

The Minister said good progress has been made in the course to remove South Africa from the Financial Action Task Force (FATF) grey list.

“We have made good progress, as seen in our most update from FATF on our journey to being removed from the grey list, where our reforms to resolve systemic weaknesses in anti-money laundering and counter-terrorism financing, and to root the links with political party funding have been recognised.”

Godongwana said the ability to hold free and fair elections is a vital feature of any democracy, encompassing both procedural (periodic elections) and substantive (freeness and fairness) aspects.

“As custodians of the fiscus, we ensure IEC funding for successful elections. You are all aware of the announcement I made in the much-contested 2025 Budget Speech on funds allocated to the IEC for the hosting of the upcoming local government elections.

“We have allocated R885 million for the IEC and R550 million for the South African Police Service and the South African National Defence Force to maintain public order.”

The Minister said democracy thrives on continuous debate and a level playing field for the contestation of ideas.

“Transparency is at the heart of party political funding. To make informed choices when voting, voters need to know who is behind the funding of political parties and what agendas they are pursuing. We must curtail opportunities for parties with questionable intentions to gain power.

“This requires a strong fiscus and responsible public finance management, shunning wastage and ensuring traceability of all money flows,” he said. – SAnews.gov.za

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