In a significant constitutional ruling, the High Court of Australia deemed Victoria’s political donation laws unconstitutional, which may set a precedent for similar legislation across the nation. The court’s decision, outlined in a comprehensive 71-page judgement, invalidated part 12 of the Electoral Act due to its excessive restriction on the implied freedom of political communication enshrined in the Australian Constitution.
Introduced in 2018, the Victorian laws imposed a cap limiting individual donations to candidates and parties to $5,000 per electoral term. However, they permitted major parties like Labor, Liberal, and National to withdraw an unlimited amount from their fundraising entities—known as nominated entities—while other parties and independents were restricted from forming such entities. This disparity led to a legal challenge by West Party candidate Paul Hopper and former independent candidate Melissa Lowe, who argued that the system favoured established parties and stifled competition.
Hopper remarked on the ruling, stating that voters simply desire a level playing field when it comes to political funding. The High Court’s ruling aligned with this sentiment, acknowledging that the existing framework unduly benefitted the major parties at the expense of newcomers. Consequently, the Victorian government has been ordered to cover the legal costs incurred by Hopper and Lowe.
Victoria’s Premier, Jacinta Allan, mentioned that the government would carefully review the court’s verdict before making an official response. She previously proposed legislation to enable smaller parties and independents to establish their own fundraising entities, accompanied by a cap on fund transfers. Unfortunately, these reforms were abandoned prior to the legislation’s passage.
Other states, including South Australia, New South Wales, and Queensland, have implemented similar donation caps, yet federal donation rules remain less stringent, with no established limits on contributions or campaign spending at that level. Future federal reforms will cap individual donations to party branches at $50,000 annually and will impose a nationwide election spending limit of $90 million for parties, but these changes won’t take effect until 2027.
The High Court’s decision could reshape the political funding landscape in Australia, highlighting the ongoing debate over accessibility and equity in political participation. The outcome may not only spur changes within Victoria but could also influence political funding regulations in other jurisdictions across the country.