Public funding for political parties in Italy, new MiniDossier by openpolis

Electoral reimbursements have been recently abolished in Italy, but is public funding for political parties really over? Between old and new subsidies, we researched how much money every year parties continue to receive from government institutions. 

For years electoral reimbursements, as well as grants for party media and allocations for political groups in government institutions, have been the main way parties received state funding. Recently however the Monti and Letta governments approved legislation to slowly cancel electoral reimbursement, drastically modifying the situation. Things are now changing and new public revenue streams are emerging for political parties: 2×1000, tax credits and much more. With a new MiniDossier, openpolis attempted to understand in which way public funding to political parties is actually changing. What became obvious is that while before it was based on electoral consensus, now what is valued is the ability of parties to obtain private funding.

2×1000, individual donations and tax credit. 2×1000 is an Italian law under which Italian taxpayers can choose to devolve a compulsory two per thousand from their annual income tax return to political parties. Introduced in 2014 it was not much of a success (parties received a total 300.000 euro), but the following year things got better, for a total of 9.6 million euros. Until today only 2.6% of taxpayers decided to devolve their 2×1000 to political institutions. Another way for parties to make money is through individual donations. Citizens that donate up to 30.000 euros to political parties can deduce 26% of the donation as tax credit. The problem is that this benefit is also extended to donations that are not really voluntary, like the sum that all MPs have to devolve to their party once elected in government institutions.

Political groups rather than political parties. Year after year political parties are receiving less money. Political groups in public institutions on the other hand continue to obtain large amounts of subsidies. In 2014 parties were granted 35 million euros (through electoral reimbursements), while parliamentary groups in the chamber of deputies and the senate almost 50. In addition, groups in regional governments in the same year received over 80 million euros.

What has commonly been perceived as the years that brought public funding for political parties to a stop (following the Monti and Letta reforms) is not entirely true. Electoral reimbursements will indeed be completely abolished by 2017, but other, more indirect, public revenue streams for parties are emerging. The financial survival of parties in Italy is still very much dependent on public money. Fore more information read the new MiniDossier by openpolis “Sotto il materasso