ANC: R265-million from the state won't cut it

No Fear No Favour - No Handouts......

08 FEB 2013 00:00 - TABELO TIMSE

The cash-strapped African National Congress says the government must contribute more if it wants to reduce private donors.

The ANC receives at least R265-million a year in legitimate state funding, the Mail & Guardian has established. And it is looking for more money from the public purse.

Former ANC treasurer general Mathews Phosa's report to the party's recent conference in Mangaung shows that the ANC received R218-million from the Independent Electoral Commission over a five-year period. According to the commission's 2012 annual report the party received R65-million that year.

However, because it does not pass through the ANC treasury, Phosa makes no mention of the money.

All political parties receive money from Parliament for party support, constituency support and leadership support. This is in proportion to the number of seats they hold in the National Assembly. According to Parliament's 2011-2012 annual report, this totalled R311-million, of which the ANC received more than R200-million, yielding a total of R265-million in state contributions for the party. Parties also received money from provincial legislatures and some municipal councils.

Despite the scale of public funding, Phosa said that 72% of the ANC's revenue over the previous five years – R1-billion – came from fundraising and the state contribution should increase.

In the past, Phosa has argued that more public funding makes parties less reliant on private donors and would encourage disclosure.

Over the five years under review the Progressive Business Forum raised R88.4-million for the party, membership fees accounted for about R45-million and other unclassified income amounted to R14.5-million.

In the report, which covers March 2008 to November 2012, Phosa says that public funding to parties now exceeds R500-million a year, "with the ANC receiving the bulk of the funds". However, he said that the parliamentary allocation has a limited purpose: "Most political party support provided by Parliament ... is utilised by the ANC caucus, and is not available for activities outside the national legislature."

Significant annual increase
In addition, the ANC's financial performance had been "characterised by sharp increases in operational and event costs". Operational costs, especially salaries, travel and accommodation, grew by 125% over the five-year period.

A comparison of Phosa's report with that of his predecessor, Mendi Msimang, who presented his report to the Polokwane conference in 2007, underscores the significant annual increase in the ANC's revenue over the past decade. In 2002-2003, party income was R107-million; by the end of Msimang's tenure, in 2006-2007, it had risen to R177-million. Phosa reports that in 2011-2012 it reached R340-million. However, between 2007-2008 and 2011-2012 costs also rose steeply, from R162-million to R437-million, leaving the party in deficit.

"These high increases in costs are alarming and unsustainable. For the movement to sustain itself, it has to reduce operational costs drastically," Phosa said.

Spending is particularly heavy in election years. In the 2008-2009 financial year, which included a general election, it more than doubled from about R170-million in the previous year to about R470-million.

In 2011, marked by local elections, the party's expenditure jumped to R344-million. Income lagged behind at R322-million.

Unconstitutional
The size of the ANC's paid workforce has also risen steadily, from 234 employees in March 2008 to 352 in March last year. Salary costs over the period more than doubled to R130-million. "The organisation needs to reduce the number of employees," Phosa said, calling for cadres in the government and legislatures to contribute to organisational work.

He also complained about the hosting of many large events and that the fundraising environment had become very difficult "due to the economic situation, donor fatigue and the negative perceptions of the movement among business donors".

"The ANC has to ensure that the proposed political party funding Bill is passed. This will increase the public funding of political parties."

Some provinces had already adopted the Bill. Phosa said that provincial legislatures may be acting unconstitutionally by allocating substantial amounts to parties because this is a matter for Parliament.

"South Africa is moving into dangerous and challenging territory. The private funding of political parties is unregulated. Public funding is insufficient for the needs of our parties. Money also plays a growing role in the internal politics of parties, including the ANC."

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DA cautious about disclosure

The Democratic Alliance will look cautiously at the party funding legislation proposed by the ANC, as it believes that South Africa's political climate is not conducive to the disclosure of donations, the chairperson of DA's federal finance committee, Dion George, said this week.

George said that businesses feared "being put at a disadvantage" in competing for government business if they are revealed to be DA contributors.

"Look at the ANC's response to the FNB advert," he said. "What would its response be if we disclosed who our funders are?"

Asked whether the DA screened donors, George said that it followed "strict principles of making sure we know the individual donating, or if it is a business, that the business is legal, registered and operating".

There were cases when it had refused a donation because it was uncomfortable with the donor.

In 2001, the DA's image took a hit when Western Cape premier Gerald Morkel was revealed as having accepted donations from German fugitive Jürgen Harksen.

Victimisation
George said the party also made it clear to donors that there could be no favours in return.

George's comments come after it emerged that party leader Helen Zille took a donation from a senior executive at Sahara Computers, owned by the Gupta family, despite being a fierce critic of the family's association with President Jacob Zuma and the state assistance the Guptas received.

However, Zille defended her decision to accept the money, saying that the Guptas were not controversial at the time and the DA had given no benefit in return.

Zille told the Sunday Times that the party would introduce legislation to make political funding more transparent, but only when it became the ruling party. She said: "I can also guarantee there won't be any victimisation of anyone who funds our opposition."

On the ANC proposal that public funding of parties should increase, George said that, although the DA could do with extra money, "we don't want to put extra pressure on the public".

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    The M&G Centre for Investigative Journalism (amaBhungane) produced this story. All views are ours. See www.amabhungane.co.za for our stories, activities and funding sources.

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