Running political parties is an expensive business

Jan 26, 2007 | Newsletters



Mangosuthu Buthelezi’s Weekly Newsletter to the Nation

My dear friends and fellow South Africans,

Running political parties is an expensive business. Campaigning, staffers, research, entertainment, transport, fixed overheads such as offices, polling and focus groups. The list of costs is exhaustive. As our constitution expressly provides for multiparty democracy in its founding provisions, the crisp policy issue is whether the present arrangements support this outcome.

The place of political parties in a democracy is, despite the flaws, incontestable. Political parties provide a direct link between the citizenry and the legislative process in a way no other forum can.

By definition, political parties are funded by contributions from their membership and by individuals and organisations which share their political ideas or who stand to benefit from their activities. Political parties, especially those in government, are lobbied vigorously by organisations, businesses and special interest groups such as trade unions.

As a result, it is accepted that party politics in a democracy requires private funding as well as public funding. Rules designed to regulate private funding should promote multi-party democracy and accountability.

I believe we are facing a crisis on both fronts. The absence of a private funding legislative framework is anomalous given South Africa’s commitment to transparency.

Some defenders of the status quo might retort that multi-party democracy is not imperilled because there are 16 parties represented in Parliament. The rules of the game have, however, encouraged the primacy of a single party. The governing party can now amend most of the Constitution at will and is only a few members short of the numbers required to amend those sections requiring a special majority of 75%.

There is a broad consensus across political parties that there is a need to regulate private party funding. Unless we adopt a more transparent approach, the current absence of a regulatory framework threatens to undermine other efforts to defeat corruption. As Hennie van Vuuren observed in a tightly argued article in Business Day this week:

"Until the private funding of political parties is regulated, expect more scandals involving undemocratic regimes, fronts for political parties and corporate donors exhibiting an unhealthy taste for self-interest. The lack of interest shown by political parties in regulation will be rewarded by dwindling party membership and voter turnout". What are the present rules of the game?

Parliament annually appropriates a sum divided between represented parties on the basis of proportionality (90% on the basis of seats held) and equity (10% divided equally among parties). For many smaller parties, this is their major source of funds.

But the money provided via the budget is a drop in the ocean compared with what the parties spend collectively. Most funding is derived from other sources, mainly the local private sector and foreign sources.

It is impossible to calculate the amount of funds made available to parties by donors over the past thirteen years. With respect to the vast majority of large donations, secrecy remains the norm. Anecdotal evidence suggesting truly astonishing sums: hundreds of millions of rands from foreign donors and many tens of millions annually from local companies. This stream of largesse has been directed overwhelmingly to one party, with significant sums to another. This is patently bad for multi-party democracy.

The Institute for Democracy in SA (Idasa), which has been a strong advocate for reform for many years, has supported a multi-party dialogue. One exciting proposal is for companies to make their donations to a multi-party fund. I believe this would be one way to go.

Regulation should cover as wide a definition of donation as possible, in order to close as many potential loopholes as possible. Disclosure should cover not just cash donations but also payments-in-kind, loans and special discounts (a major controversial point in Britain at the moment), for example.

In addition, the rules and laws relating to corporate accounting and reporting should be extended to require corporations, both domestic and multi-national, to make explicit disclosure of all donations to political parties.

Party funding is not just in crisis in South Africa.

In the United Kingdom, the dire position of the two big parties suggests the current arrangements for funding political parties are broken beyond repair. The so-called "cash for peerages" investigation is presently establishing whether the parties have put forward nominations for peerages (seats in the House of Lords, Britain’s upper house) in return for financial favours.

Incidentally, cash for peerages is hardly a new phenomenon. Prime Minister Lloyd George was famously found to have been selling peerages and to prevent such corruption in future, Parliament passed the Honours (Prevention of Abuses) Act 1925 into law.

Prime Minister Tony Blair was questioned by police in December and his political secretary was arrested at the crack of dawn last week. Images, as some commentators have conjured up, of Cherie Blair hanging out of the top window of Number 10 as her husband is led away by the boys in blue may make for many a humorous cartoon sketch, but they also serve as a timely warning of the damage inflicted upon the political process in the absence of a adequate party funding regime.

Some UK politicians across the political spectrum are now advocating that parties should be funded by the state; a previously unacceptable proposition that promises to give rise to dramatic debate. Along with the increased scrutiny of donations there has been a long term contraction in party memberships in the UK and elsewhere and this has placed more strains on funding. We must draw lessons from this.

I, working within the South African context, also subscribe to the view that greater openness is not just predicted by the constitution, but that there is a constitutional imperative to ensure that there is a level playing field so that the wealthy cannot purchase influence in secret and eclipse the views and access of the poor to the decision-making process.

As the leader of the country’s largest predominantly black (and very poor) opposition party, this, for me, cuts like a hot knife through butter to the core issue. The question of party political funding is also a human rights issue concerning political equality and socio-economic justice. The issue really touches on the essence of representative democracy where the majority still live in hardship.

There are, in the end, two simple solutions.

Either democracy pays big money to support politics or big money (read large corporations) pays for politics and exercises a say over democracy. I prefer the former.

Though change is inevitable, it must be done as soon as possible. I hope legislation will be in place before the 2009 elections and, in respect of private funding, that there will be a voluntary adoption of a new approach well before then.

Yours sincerely

Prince Mangosuthu Buthelezi MP

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