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23 August 2005

Madam Speaker
Honourable Ministers, Deputy Ministers and Members
Comrades and Friends
Ladies and Gentlemen

I want to start by apologising on behalf of Minister Mabandla, who is abroad and could not be here today to address the House on this Bill. I want to commence by thanking in advance all these parties who will be supporting the passing of this Bill.

Madam Speaker,

The principal objects of the Bill before the House today are two-fold, namely:

* To amend the Public Funding of Represented Political Parties Act of 1997 (to which I will refer as the Funding Act); and
* To amend the Determination of Delegates (National Council of Provinces) Act, 1998 (to which I will refer as the Delegates Act).

The majority of the amendments to these two Acts are necessary as consequential amendments to address certain matters emanating from the "Crossing-the-floor" legislation that was passed by this Parliament in 2002 and 2003.

I want to make it clear upfront that the Bill does not deal with the principle of "floor crossing," but merely seeks to regulate matters in other legislation consequential to "floor crossing."

The Portfolio Committee on Justice and Constitutional Development in its 2003 report on the “Crossing-the-Floor” legislation, recommended, among others, that the Department of Justice and Constitutional Development and other relevant role-players “Review the laws pertaining to the funding of political parties, in particular parties represented in a legislature, and to take such steps as may be necessary to ensure that those provisions are aligned with the changes effected in terms of the above legislation. Consider all legislation which may need to be amended in order to be brought into line with the new laws referred to in paragraph 1, and to make recommendations regarding such changes as may need to be affected.”

Madam Speaker,

The Constitutional Matters Amendment Bill seeks to amend, inter alia, the Delegates Act so as to make provision for the re-determination of certain delegates of a provincial legislature which has been reconstituted on account of changes of party membership and mergers or subdivision of parties.

As the amendments to the Delegates Act do not affect this House or its members, I will today concentrate on the amendments to the Funding Act.

In terms of Section 236 of the Constitution national legislation must provide for the funding of political parties participating in national and provincial legislatures on an equitable and proportional basis. The Funding Act that was enacted to give effect to that constitutional requirement, among other things:

* Established the Represented Political Parties’ Fund (the Fund) with a view to making provision for the funding of political parties participating in Parliament and provincial legislatures; and
* Regulates the allocation of moneys from the Fund to political parties.

In terms of Section 5(2)(a) of the Funding Act, allocations from the Fund must be made and paid to each of the political parties concerned in accordance with a prescribed formula based, in part, on the principles of proportionality and equity. Consequently, if a political party’s representation in the National Assembly or a provincial legislature has been affected as a result of "floor crossing," it will affect the allocations from the Fund.

In terms of the Regulations made under Section 10 of the Funding Act, the Independent Electoral Commission must within two weeks of the beginning of a financial year of the Fund, announce the total amount of funding available for allocations. Provision is further made that the allocations from the Fund to be made and paid to each of the political parties concerned are calculated by allocating:

* 90 percent of the total amount of funding proportionally; and
* 10 percent of the total amount of funding equitably.

The Regulations also provide that all allocations each year be paid in four equal instalments. These instalments are payable in April, July, October and January each year. The window for "floor crossing" (1 to 15 September) falls between the date on which the second instalment has been paid and the date on which the third instalment is payable. Consequently, if a political party’s representation in the National Assembly or a provincial legislature has been affected as a result of "floor crossing," it will also affect the third and fourth instalments to which it is entitled.

A need has therefore arisen to regulate the re-allocation of moneys from the Fund after the window period for "floor crossing" for that particular year. In order to address that need, it is necessary to amend the Funding Act and the Regulations made under that Act.

This Bill therefore seeks to amend the Funding Act so as to:

* Regulate the repayment of unspent balances of all allocated moneys in terms of the Funding Act when parties cease to qualify for such allocations as a result of changes of party membership, mergers or subdivision during the window period for "floor crossing;" and
* Provide for the re-allocation of moneys in the year in which “floor crossing” takes place, where a member of a legislature becomes a member of another party whilst retaining membership of that legislature or where an existing party merges with another party, subdivides into more than one party or subdivides and any one subdivision merges with another party.

The new Section 6A that is to be inserted into the Funding Act, regulates the circumstances under which a political party, after the window for "floor crossing," has to repay to the Electoral Commission the unspent balances of all monies that had been allocated to it in terms of the Funding Act. The main principles contained in that new section could be summarised as follows:

* Firstly, if a member of a legislature becomes a member of a party, other than the party which nominated that person as a member, the nominating party does not have to repay to the Electoral Commission its unspent balances in respect of the seat held by the concerned member.
* Secondly, a party (the original party), which immediately prior to the window for "floor crossing" qualified for an allocation, does not have to repay to the Electoral Commission its unspent balances if it subdivides into more than one party or subdivides and any subdivision merges with another party during the window for "floor crossing," and any subdivision of the original party continues to:
- Represent that party in the legislature concerned after the date on which the Speaker of a legislature has published the notice required by item 5(3) of Schedule 6A to the Constitution that reflects the number of seats allocated to each party represented in that legislature and the name of party represented by each member; and
- Qualify for the allocation of moneys from the Fund, whether the subdivision of the original party has changed the name of that party or not.
* Thirdly, a political party which immediately prior to the window for "floor crossing" qualified for an allocation, must repay to the Electoral Commission its unspent balances if it ceases to qualify for the allocation of moneys from the Fund as a result of its:
- Only member or members changing party membership;
- Merger with another political party; or
- Subdivision into more than one party.

The new Section 6A also places some obligations on the accounting officer or leader of a political party that has to repay to the Electoral Commission its unspent balances. Provision is further made that an accounting officer or leader of a party, who fails to comply with these obligations, will be guilty of an offence in certain circumstances when they do not do so.

In order to enable a political party, that ceases to qualify for the allocation of moneys from the Fund and that has to repay its unspent balances, to comply with its existing legal financial obligations, the Electoral Commission is granted the discretion to determine the amount of unspent balances that must be repaid.

The Regulations made under the Funding Act have been amended to:

* Empower the Electoral Commission to re-allocate 50 per cent of the total amount of funding for the financial year in which "floor crossing" is permitted to the political parties that, after the date on which the Speaker of a legislature has published the notice required by item 5(3) of Schedule 6A to the Constitution (i.e. after the window for "floor crossing"), qualify for the allocation of moneys from the Fund; and
* Regulate the times and intervals of the payments of the re-allocations.

Madam Speaker, I have also noted the Report of the Portfolio Committee and will bring the contents thereof to the attention of the Minister as a matter of urgency.

Lastly, may I thank the Portfolio Committee, especially its Chairperson, Ms Fatima Chohan, and the leaders of the parties in the Committee for a job very well done and especially doing a fast-tracked Bill.

I thank you.

Issued by: Ministry of Justice and Constitutional Development
23 August 2005