Tuesday marked exactly four years since the Political Party Funding Act, now known as the Political Funding Act (PFA), became operational. To mark the anniversary, the Portfolio Committee on Home Affairs (“the Committee”) ignored the evidence and pushed for more secrecy and reduced accountability in political funding. The Committee’s actions have exposed where its members’ priorities lie and show their disregard for the people they represent and the Constitution they are supposed to be upholding.
The Political Funding Act was developed to strengthen democracy, curb corruption, and empower voters. It does this through two crucial limits – the annual donations cap of R15m, and a disclosure threshold of R100k. These limits are still in place. But on 1 April, the Committee inexplicably adopted a proposal by the ANC to double both of these limits to R30m and R200k respectively. Not a single member objected to the proposal when it was adopted. If adopted by the National Assembly, and then determined to be suitable by the President, these will be the new limits.
Committee members were fully aware that their decision was irrational and politically expedient. They rejected well-considered and evidence-based approaches to determining political funding limits that were proposed by the Parliamentary Budget Office (PBO), laying bare that power and money trump principle.
How did we get here?
The Committee’s proposal to increase the limits is merely the latest development in a long-running campaign by the political elite, led by the ANC, to undermine and weaken the PFA. Last year, following a series of legislative missteps by Parliament and the President, a lacuna was created in the political funding law that removed the limits, leaving political parties with no legal obligation to disclose their donations and no upper limit. MVC successfully launched urgent proceedings in the Western Cape High Court to close this lacuna. The judgment reinstated the original limits and these are still in effect. The Committee then embarked on a public participation process with a view to passing a resolution adopting new limits.
As part of this process, the PBO was asked to explain the rationale for the original determination of the R15m limit and the R100k disclosure threshold. It emerged, as we have known for years and have argued in our recent court case, that there is no evidence that either limit was ‘determined with regard to any studies, data or analysis as to the appropriateness of that limit’. The constitutional principle of rationality requires that there must be a rational relationship between the legislative scheme that Parliament adopts, on the one hand, and the achievement of a legitimate governmental purpose, on the other. If this rational relationship is absent, on account of Parliament acting arbitrarily or irrationally, then the legislative scheme is unconstitutional. Importantly, our courts have recognised that failing to take relevant information into account when adopting a particular legislative scheme can render the legislation irrational.
There has never been a rational basis underlying the R15m and R100k limits and the PBO admitted to this. This revelation led the Committee to request that the PBO conduct further research on the limits so that it could make a more informed, evidence-based decision. At the time, this seemed to be a prudent and wise approach.
PBO Report: A well-considered report ignored
The PBO provided a detailed report (dated 4 February 2025) and a summary of its recommendations to the Committee. In the words of the PBO, one of the report’s objectives was to ‘contribute to a more informed and evidence-based discussion on strengthening the Political Party Funding Act and promoting transparency, accountability, and fairness in South Africa’s political party funding system’.
Crucially, the report found that ‘South Africa stands out as an outlier for being a middle-income country with a higher private donation upper limit than many higher-income nations, such as Poland and Mexico, where stricter regulations impose private donation limits based on minimum wage multiples or campaign expenditure limits’ (emphasis added).
The PBO recommended that the Committee assess the impact of the thresholds in relation to their ‘effects on democracy and smaller political parties, and their capacity to promote accountability, level the playing field, reduce undue influence and enhance transparency’. It also argued that more time was required for further research to determine the cost of running parties and campaigns, and warned that ‘Parliament should be concerned that large-scale private donations have the potential to influence governance and electoral outcomes’.
Taking these factors and its comparative research into account, the PBO proposed four options with respect to the upper limit and three options for the disclosure threshold, outlined here, for the Committee to consider.
The report was well-researched and considered the necessary balance of various factors, including that running a political party is an expensive operation. It provided the Committee with several potential formulas for working out the new limit and threshold, each underpinned by a clear rationale and accompanied by appropriate evidence. It even acknowledged that one of its recommendations – determining the new limits by adjusting the original limits to account for inflation – was based on a flawed foundation, given the original limits were set seemingly arbitrarily without reference to any rationale. But this is largely beside the point, because the PBO’s proposal/s and considerations have been ignored by the Committee.
The Committee: Hypocrisy and the rejection of reason
On Monday, ANC MP Modise-Mpya justified her party’s proposal to double the limits: ‘we all understand that the state is unable to fund political parties including independents so it would make sense to double the amounts as proposed’. The ‘justification’ (that not a single member objected to when the Committee voted): it just makes sense, it just feels right. No reference to the proposals or figures presented by the PBO. No indication that issues of transparency, accountability, and preventing undue influence had been considered. No justification, other than politics is expensive. No explanation of how doubling the limits, given South Africa is already an ‘outlier’ for having comparably high limits, is rationally linked to achieving the PFA’s objectives.
The argument that the state cannot fund politics is also misleading. The PBO report showed that between 2020/21 and 2023/24, public funding to political parties amounted to more than R6.5b, representing an increase of nearly 50% in four years. Just last week, the Gauteng Legislature decided to dramatically increase allocations to parties represented in the legislature. Political parties will always want more funding, but they cannot expect a blank cheque when at times they have not even used their full allocation of public funding. To claim that the state cannot fund parties is disingenuous and mischaracterizes a complex issue.
Modise-Mpya’s position also departed from her own party’s resolution on the role of money in politics as adopted at its 55th Elective Conference in 2022, where it resolved that ‘the State must fully fund the activities of all political parties as part of funding democracy, and protecting the independence, transparency, accountability and integrity of political parties’. The ANC’s political winds seem to have changed, and with it, their principled approach to this issue.
And this is not to single out the ANC. The EFF, yet further removed from any evidence-based approach, felt the Committee should be ‘bold enough’ to raise the limits to R100m and R1m respectively, citing administrative burden and donors wanting privacy. While the DA, on the surface, seems to have had a more principled approach by initially supporting the PBO’s inflation-adjusted option, this belies the fact that the original limits were decided arbitrarily without reference to any justification, and so any adjustment thereto is tainted by the same irrationality.
What the Committee should have done was follow the PBO’s suggestion that further research be conducted to determine what limits would achieve the PFA’s objectives given South Africa’s unique socio-economic context. As the PBO report put it, ‘setting the upper limit based more on measurable socioeconomic consideration, rather than solely on political considerations, can minimize undue influence and ensure a fair and objective standard. This approach would likely enhance transparency and public trust in the political funding system’. The PBO also warned of the problem of a handful of donors dominating the funding system and the ‘potential for disproportionate influence’, as MVC has done previously.
What happens next?
On Tuesday the Committee issued a statement congratulating itself for ‘striking a balance between the considerate cost of running political programs and the needs for transparency’, and opining that the public participation was rigorous. Committee Chair, Mosa Chabane, is quoted as saying that the ‘recommendations made are also evidence-based, and they take into consideration that there was no framework that guided the previous upper limit and threshold’. Let us be clear: the Committee rejected the evidence and the approaches emanating from the evidence.
We accept that there is no ‘perfect’ approach to regulating party funding and that there will always be a level of subjectivity to how the threshold and limit is determined. However, this Committee is entirely unable to justify and substantiate their reasoning for arriving at these new limits.
Before the Committee voted, we wrote here, that it remained to be seen how it would deal with this issue. But unfortunately, what transpired in Parliament on Tuesday was not an April Fool’s joke. The Committee has failed to address this crucial matter through a rational approach that is based on principle and evidence, and that is free from political interference. That it was adopted unanimously with no objections is disgraceful.
The resolution and report will be tabled before the National Assembly. We hope that principle and reason will prevail, and that the House will reject its recommendation and return it to the Committee to be rectified. MVC will take whatever legal action is required to ensure that our party funding legislation is rational and premised on the needs of South Africa’s context, not the whims of those in power who have a vested interest in shrouding party funding in secrecy.
Submitted by Joel Bregman, My Vote Counts Project Lead on Money in Politics
