Political Party Funding VIII - National and Provincial Spending

As Parliament's Ad Hoc Committee on the Funding of Political Parties continues its work, it is crucial to scrutinise all forms of public funding. This brief looks at the allocation of funds by provincial legislatures and the problems that it currently poses.

Introduction

Much of the scrutiny surrounding political party funding focuses on the portion of funding controlled by the National Assembly.  But the majority, around 55%, of the public funding for political parties is allocated by provincial legislatures. Section 116 (2)(c) of the Constitution stipulates that provincial legislatures must provide financial assistance to each represented political party in order for them to be able to function effectively. Unlike the money allocated at national level, which is allocated both equitably to all represented parties and in proportion to each party’s share of representatives, provincial funding is entirely proportional to representation in the legislature.

Problems exist with provincial funding for three main reasons. The first of these is incomplete information, which limits the transparency of many of these transfers. The second is the lack of a regulatory framework resulting in a highly uneven distribution of funding across provinces. While the third is the disproportionate amount of funding channelled through provincial legislatures in comparison to the National Assembly.

Analysis

In their submission to Parliament’s Ad Hoc Committee on Political Party Funding, National Treasury complained that they struggle to access information relating to provincial expenditure on political party funding. While they were able to access total amounts spent, there was little information available on how it was allocated and for what parties used the allocations for. It is also not clear how much is allocated directly to political parties, and how much is allocated to allowances to permit Members of Provincial Legislatures (MPLs) to carry out their duties as public servants. There is currently no national reporting requirement for disclosure.  Accordingly, there is a degree of uncertainty in some of the provincial estimates set out below.

The most recent audited expenditures are for the 2015/16 financial year.  Table 1 sets out the national allocations to the Represented Political Parties Fund (RPPF) and to Parliament to cover the expenses of MPs in the performance of the functions.

Table 1 - National Allocation 2015/16

 Table 2 sets out provincial allocations in the same financial year.  The number of Members of Provincial Legislatures are reported, along with the National Treasury’s estimate of expenditures in their presentation to the Parliament Ad Hoc Committee on Political Party Funding on 1 September 2017.  From these estimates, an allocation per MPL is calculated.  The right hand column of Table 2 sets out the 2015/16 estimates of expenditure from provincial budgets.  In some provinces they are identical to the Treasury estimates.  In others, they are higher.  The discrepancies are an indicator of the information problem.

Table 2 - Provincial Allocations 2015/16

Figure 1 graphs the information in Tables 1 and 2.  It is based on the total national and provincial allocations.  It shows the discrepancies between provinces clearly.

FIGURE 1

The allocation per MPL is higher than the allocation per MP in five provinces.

Table 3 presents our best estimates of allocations directly to political parties. 

Table 3 Transfers directly to parties - 2015/16

Figure 2 compares allocation directly to parties per MPL by province with allocation per MP to the RPPF.

FIGURE 2

Figure 2 shows that allocations directly to parties per MPL in all provinces are higher than the allocation per MP through the RPPF.  This accords with the National Treasury’s submission to the Parliamentary Committee on 1 September, which pointed to the imbalance between national and provincial allocations,    with provincial governments spending a larger overall amount on party funding.  The National Treasury representative argued that any increase in national funding should be accompanied by a decrease in provincial expenditures.

The second issue is the lack of uniformity between provinces. The largest total allocated per MPL was greatest in the Free State at R 1 986 200, and the smallest allocation per MPL was in KwaZulu-Natal, which spent only R 375 000.

Conclusion

Provincial funding is allocated to political parties according to the Constitutional requirement in section 116 (2)(c).  But the lack of appropriate regulation has led to imbalances, both between the national and provincial level, as well as between the provinces themselves.   Additionally, reporting does not distinguish adequately between (a) transfers to political parties (b) allowances for expenses  by MPLs in performance of their functions, for which financial claims can be made and or (c) provision in kind to MPLs. The current position is unsatisfactory and the Parliamentary Ad Hoc Committee should give attention to the ways in which it can be improved.

Rafael Friedman is a Researcher at the Helen Suzman Foundation.

This article first appeared as an HSF Brief.