Government wants taxpayers to give more money to political parties

Finance minister Enoch Godongwana is proposing that political parties be fully funded by public money, arguing that running a party is incredibly pricey and a reliance on private donors destroys their independence.

Speaking at the Independent Electoral Commission’s (IEC’s) Symposium on Political Funding in South Africa, Godongwana said that a functioning democracy requires “competitive elections by political parties that are not beholden to private interests.”

“Political parties are not sufficiently funded, hence their reliance on private funding. It is my view that political parties must be fully publicly funded,” he said.

His address came as South Africa grapples with declining trust in political institutions and heightened public scrutiny over the use of public funds.

Speaking on the consequential Political Party Funding Act (PPFA) that came into effect in 2021, Godongwana hailed reforms introduced by the legislation, including:

• Mandatory disclosure of donations above R100,000, which has been amended to R200,000;
• A cap of R15 million (soon to be R30 million) per donor annually;
• Bans on foreign state donations; and
• The establishment of the Multi-Party Democracy Fund.

“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,” said Godongwana.

However, the Minister warned that loopholes and weak enforcement continue to threaten the integrity of democratic processes.

“Despite these advances, challenges remain in enforcement, local transparency, and curbing illicit financing,” said Godongwana.

For example, the majority of parties have failed to submit annual audited statements over the past three years, as required by law, and the IEC is pursuing sanctions.

The finance minister added that current legislation excludes local government, calling for expanded oversight as an opaque donation system enables undue influence and fund misallocation.

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

Godongwana reported good progress in removing South Africa from the grey list, yet more needs to be done.

“To do this, 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.”

How do parties get their funding?

“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,” said the Minister.

However, donations are not the sole revenue stream for political parties in South Africa, as they receive funding from a combination of public and private sources.

Public funding is provided by the Represented Political Parties Fund (RPPF), which distributes money to parties represented in the National Assembly or provincial legislatures.

The fund is sourced annually from the National Revenue Fund and disbursed quarterly by the IEC.

The RPPF is distributed based on a two-part formula:

• One-third (33.3%) is allocated equally among all eligible parties, ensuring smaller parties receive support.
• Two-thirds (66.6%) is distributed proportionally based on the number of seats each party holds in the National Assembly and provincial legislatures.

The amount allocated to represented parties through the RPPF in 2022/23 was R342 million, and R322 million in the adjusted appropriation for 2024/25.

According to the 2025 national budget, R335 million will be allocated to represented parties through the RPPF in 2025/26.

Overall, the amounts remain relatively constant for the next few years, with an amount of R367 million estimated for 2027/28.

As shown, funding through the RPPF has barely increased over the past few financial years.

“This belies the passion with which parties spoke about the need for more funding,” wrote democracy advocacy group, My Vote Counts, after Parliament recently voted to double donation disclosure thresholds.

“If parties are indeed so desperate for additional funding, why did they accept a Budget that offers them a real-term reduction in public funding?”

“It may be the case that parties would rather take funds from private sources, because there are no restrictions or conditions on how these funds are spent, and no requirement to report on the expenditure of these funds,” added the group.

Looking at other revenue streams, private funding can come from membership dues, private donations, and potentially from the Multi-Party Democracy Fund, which the Electoral Commission also administers.

Prior to 2018, private funding lacked regulation, leading to concerns about undue donor influence, which prompted legal challenges by organisations like My Vote Counts to compel disclosure.

This culminated in the PPFA, which introduced, among other disclosures, the Multi-Party Democracy Fund that accepts private donations and disburses them to political parties represented in national and provincial legislatures.

Examining another private stream, South African political parties reported nearly R231 million in donations during the 2024/25 financial year.

This does not mean that this is the sole funding for all parties, but rather their larger contributions disclosed by various registered parties or donors, as required by law.