In Finland, political parties receive state subsidies based on the number of seats they secure in the parliamentary elections. The use of political party subsidies and other party funding is closely monitored. The Parliament of Finland decided on the subsidy system in the 1960s to reduce the influence of foreign powers on Finnish political parties and to strengthen democracy. Over the years, there has been heated political debate on the level and criteria for granting party support.
In Finland, the state funds political parties through party support, which is distributed to parties based on the number of seats they secure in elections. Partial party support is also available to parties that have received at least 2% of the votes cast on the national level in parliamentary elections.
Party subsidies are an important source of income for Finnish political parties. In 2024, nine parliamentary parties were granted Finland’s state funding. The party with the largest number of seats in the Parliament, the National Coalition Party with 48 MPs, received almost MEUR 8.3 in 2024, while Movement Now, with just one MP, received just under EUR 173,000. In addition to state subsidies, Finnish political parties finance their activities through donations, membership fees and other fundraising from companies, organisations, foundations and individuals.
The distribution of financial support according to the number of seats in the Parliament is primarily intended to reflect the will expressed by voters in the elections. Thus, changes in party allegiance of representatives transferring from one group to another or the creation of a new political group during the election period do not affect the amount of support for the original group.
What is party support used for and how is it monitored?
According to the Act on Political Parties, the State Budget and the Government’s State Aid Decision, party subsidies are intended to support political activities and communication of the political party. In practice, party support is used to run the activities of a national political organisation, including organisational and staff costs, the activities of district and women’s organisations, communications during elections and administrative costs.
Party support cannot, for example, be directly transferred to individual party candidates as election funding or used for personal expenses. Salaries for Members of Parliament and state subsidies for parliamentary groups are paid from a separate budget line and are not included in the party subsidies.
Transparency aims to prevent corruption and increase citizens’ confidence in the democratic system.
The Act on Political Parties obliges parties to be transparent about their funding: political parties must report to the National Audit Office of Finland (NAOF) regarding their finances including election funding and significant amounts of external support. A political party must declare to the NAOF the amount of support it has received if the donation is at least EUR 1,500 per calendar year. Non-monetary contributions are also assessed in euros and reported according to the same principle. A political party or a party-associated organisation may not receive aid if the donor cannot be traced. One donor can make donations up to EUR 30,000 per year. Donations larger than EUR 30,000 per year are prohibited.
The number of international donors is also limited, so political parties may only accept donations from individuals or international organisations and foundations representing the party’s ideology. Up-to-date party financing declarations, advance declarations and financial statements relating to party funding and campaign funds are available on the website of the NAOF. Transparency aims to prevent corruption and increase citizens’ confidence in the democratic system.
Parties comply reasonably well with the rules, according to the annual NAOF report on the control of party funding. During 2023, political parties declared a total of around MEUR 7.1 in subsidies received. During the year, 52 party organisations, including all parliamentary parties, were inspected by the Audit Office. The main areas for improvement were the internal monitoring and documentation of party subsidies. The report also shows that parties responded to the audits, as demonstrated by the retrospective addition of some EUR 550,000 worth of declarations to the register during the audit.
Election funding for parties and candidates is also closely controlled. Political parties can make an advance declaration of campaign expenses and funding before the elections. After the elections, parties are obliged to submit a breakdown of their campaign financing within three months of the adoption of the financial statements.
Individual candidates are required to submit a declaration of their campaign finances within two months of the election results being certified. A candidate’s election financing may consist of their own funds, loans taken by the candidate, support from a support association, or other support. The name of the sponsor must be indicated in the election finance declaration if the value of the support exceeds EUR 1,500 for national and regional elections or EUR 800 for municipal elections. Declaration of contributions below this amount is optional.
The decision to pay party subsidies was motivated by the desire to prevent foreign funding and the influence of foreign powers.
The report on the oversight of election campaign funding in the 2023 parliamentary elections states that all 273 persons elected as members or deputy members of the Parliament had submitted their election financing declarations to the inspectorate. However, only 44% of all candidates had submitted an advance declaration before election day, thus limiting the voters’ access to the candidate’s election finances.
Grants for women’s organisations and youth activities of political parties
Political parties must spend 5% of the subsidies they receive on women’s political activities according to the terms of the political party support. This percentage is confirmed in the government decision on subsidies and is a well-established practice in Finland. Most political parties direct this contribution to the activities of their women’s organisations. In addition, this earmarked party funding is used, for example, to support women candidates in elections.
No similar share of party support is earmarked for youth organisations or youth activities. Nevertheless, several parliamentary parties finance the activities of political youth and student organisations that are ideologically aligned. In addition, some political youth organisations receive general grants for the activities of national youth organisations from the Ministry of Education and Culture.
Why are state subsidies for political parties financed?
The political party support dates to the 1960s, when the Parliament of Finland decided to pay subsidies for political parties. The official reason was to strengthen democracy. It was also motivated by the desire to prevent foreign funding and the influence of foreign powers, foremost the Soviet Union, on Finnish parties. By European standards, Finland has one of the oldest party support systems. Most OECD countries have some form of public funding system for parties, based either on votes in parliamentary elections or on representation in parliament.
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The views expressed are those of the author and do not necessarily reflect the views of Demo Finland.