Party subsidy is government subsidy given to political parties to help them in campaigning, research and arranging events. The countries where a party subsidy is paid are Austria, Denmark, Finland, Germany, Italy, The Netherlands and Sweden.
Before the modern mass media, newspapers and party meetings were the most important ways of large-scale communication. Radio was also important, but the radio stations was often controlled by a government agency or corporation, such as Yle in Finland or BBC in Great Britain. This kind of defeated the purpose of debating politics, even if the agency was relatively fair. Many parties also arrange events that are beneficial to the community in general. For example, when I was a child, I went camping in two camping events, one arranged by communists and one by the church (*. Neither involved talking politics, although the church event included patriotic songs and pledging allegiance to the flag (the song being "Siniristilippumme"). Thus, the church was 100% more political than the communists were.
The solution to this problem was to give a subsidy to the press, so that they could publish opinionated material. Parties often had - and have - newspapers that supported them or were published by the party. This system is still in effect in Sweden, where political newspapers get a subsidy. However, this is difficult to administer, because a newspaper is a private corporation.
The system in Finland works in a more direct way: the subsidy is given directly to the parties. A "party" is a registered union that is registered as a party, which requires at least 5000 members. The share of a party from the total allowance is determined by the number of seats they occupy in the parliament. There are 200 total seats, so each MP means 1/200 of the total. This means you can't just register your organisation as a party and get money.
"Campaign funding is fascinating. Politicians owe favours to corporations and especially to interest groups. I felt it very binding, when the Union of Agriculture, the Federation of Trade Unions and the Union of Employers and Industry supported me in the EU elections. Nevertheless, I try not to bow to any direction. ... The example of USA warns. When George W. Bush approved the tariffs, he bowed to the steel producers of USA and threw away his principles like a rattlesnake throws away its skin. In Finland, the parties get a subsidy from the government, so they don't have to go panhandling to find financers."
- Ari Vatanen, Member of the conservative European People's Party in the European Parliament in Pohjalainen (May 15, 2002)
Running any organisation, which is supposed to know things and advertise itself costs money. Four-color glossies are terribly expensive. The parties get the money from somewhere, but there's no free money. Fund raising often helps, but in the end, it's only peanuts compared to the cost of campaigning nationally. Certainly you've heard of scandals in raising funds for parties. The parties resort to dubious methods of raising funds, and even to crime, if they have to. In addition, the party ends up owing something to the donor.
It is a common populist way to gain support by whining about the party subsidies. However, the citizens must ask themselves: do we really want the American system, where corporations buy laws and decisions as they wish? The most infamous examples are the DMCA and slowing down the Microsoft anti-trust suit. This lack of independence need not to be this drastic, but it is important in the ideological sense. Parties, that is, people interested in politics are necessary in maintaining a democracy, and so they must be at least independent, if not totally reliable. The party subsidies were 10 million euros last year in Finland. This is a small price to pay for the independence of the decisions of the government. That's only two euros per citizen!
Yes, some of the money will be used for Stupid Stuff™. That's inevitable, but it's better that they owe no one a favour for the Stupid Stuff™. And yes, even the most bourgeois capitalist has to pay for the communist campaign. It's better to fund politicians to say things you don't like than corporations "funding" politicians to say things they like. The way the allowance is shared is a bit unfair, but it works. If small parties were given more money proportionally, parties would split to smaller segments to gain a greater total share. The money-per-seat system encourages gaining support.
Critics do have some arguments that cannot be fended off directly. The system facilitates maintaining the consensus. A party should gain maximum support, which is dangerously close to trying to please everyone. Then, the big parties have more funding, so trying to promote an alternative cause is extremely difficult. There have been n+1 attempts, but almost no one have had the capacity to challenge the current establishment or to break the consensus. The Green parties of different countries are just about the only ones to leave a permanent imprint to the political system, because they have quickly gained enough support to get a sufficient party subsidy in order to campaign effectively.
(* Originally I wrote that the conservatives arranged this camp, but later I remembered that it was the church. The point is still valid.
Ari Vatanen's original text: "Vaalirahoitus on kiehtovaa. Poliitikot ovat velkaa yrityksille ja varsinkin etujärjestöille. Itse tunsin hyvin velvoittana, kun MTK, SAK ja TT tukivat minua EU-vaaleissa. Yritän silti olla kumartamatta mihinkään suuntaan. ... Amerikan esimerkki varoittaa. Hyväksyessään tullit Bush kumarsi USA:n terästuottajia ja luopui periaatteista kuin kalkkarokäärme nahastaan. Suomessa puolueet saavat valtiolta tukea, joten niiden ei tarvitse mennä hattu kädessä rahoittajia etsimään."