The cornerstone of unity

19 PARTY SUBSIDIES
Finland’s state budget includes a fixed allocation for supporting party political activities. In 2017 this allocation 
amounted to 29.63 million euros. It can be used, in accordance with section 9 of the Political Parties Act and 
section 1 of the Party Subsidies Decree, to provide grants to political parties which are represented in the 
Finnish Parliament (innovation no. 1), and to support their public activities as defined by their constitutions and 
programmes. 
Party subsidies are granted by the government (innovation no. 7) according to the number of seats held in 
Parliament. The decree provides that the parties allocate at least 8% of the subsidy to women’s activities and 
8% to district organisations, and earlier it was also decreed that another 8% should be used for international 
activities. 
The Political Parties Act, which includes the party subsidy, was enacted in 1969. There have been some 
amendments to it, as good practice requires, but it is essentially in accordance with the proposal issued by 
Mauno Koivisto’s government. 
The central argument for the party subsidy is that it increases the transparency of political parties’ funding. It 
aims to liberate parties from concealed private funding and the possible pressure related to it, and it has fulfilled 

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this task fairly well. On the other hand, it is quite complicated to pressure a political party to make a certain decision. 
In general terms, any pressure is focused on individuals with a central role in decision-making. 
The party subsidy system also aims to improve the stability and predictability of party funding, though its real 
value has depreciated considerably since 1970. Only in the 2004 state budget was the allocation, which has 
fluctuated over the years according to state finances, tied to inflation. Since 2004, an extra subsidy of 10
–20% 
has been granted in election years, and there is also a separate subsidy for information activities regarding 
European Parliament elections. 
The party subsidy plays a significant role in party funding. For example, in the Finnish Social Democratic Party, 
it corresponds to around 45% of its income, including district organisations and the women’s organisation. The 
base organisation and municipal branches however depend entirely on their own fundraising and member fees. It 
is often claimed that the party subsidy covers all the recipients’ operative costs, but the example mentioned above 
clearly demonstrates that this is not the case. 
In accordance with the above-mentioned Political Parties Act, the Ministry of Justice supervises how the party 
subsidy is used, as well as the legality of party activities. 
The party subsidy has been both cherished and hated by the Finns, as it has been used by several populist 
politicians to help them get wind in their sails. With regards to democracy, there are hardly any weaknesses in 
the party subsidy system. The composition of the Parliament is decided by the people, and the size of party 
subsidy granted to each party is defined according to the number of seats it holds. This makes parliamentary 
elections a real risky business for the parties and their finances, but one cannot, and should not, complain about 
the result. 
The annual financial burden of the party subsidy currently corresponds to around two litres of petrol per 
citizen, i.e. around three euros. If this sum can significantly contribute to maintaining a transparent and 
democratic decisionmaking process in which each citizen over the age of 15 can participate even between 
elections, it is certainly not a financial burden on our nation. 
A similar transparent and public subsidy system should also be created on the municipal level, because that 
is where most concrete political decisions are made in Finland (innovation no. 4). The municipalities also 
exercise significant economic decision-making powers in issues concerning e.g. town planning. A robust debate 
on the matter has started and I truly hope that concrete models will be realised in the near future. 
A well-functioning party system is still the most fundamental element of democracy. An organisation can 
register as a political party quite easily in Finland, since it requires the support of only 5,000 people. 
Risto Salonen 
– Administrative chief of the
Finnich Social Democratic Party