Victoria left without limits on political donations after high court rules laws unconstitutional | Victorian politics

The high court has ruled that Victoria’s political donations laws are unconstitutional, leaving the state with no limits on donations and no disclosure requirements unless new legislation is urgently introduced before the November election.

The unanimous ruling by Australia’s highest court on Wednesday completely invalidated a section of Victoria’s election law that imposes caps on political donations but grants exemptions to major parties.

The decision is likely to have major implications ahead of the November state election, as well as similar campaign finance laws introduced by the South Australian and federal governments.

Victorian laws, which came into effect in 2018 and come into force ahead of the 2022 election, capped campaign donations at $4,970 per person per term but provided exemptions for funds transferred to registered political parties through “nominated organisations”.

The only parties with candidate organizations registered with the Victorian Electoral Commission are Labor and the Liberal and National parties. Although the law allows the creation of new nominated organizations, all organizations established after July 1, 2020 were subject to the donation limit.

The lawsuit was filed by Paul Hopper and Melissa Lowe, two independent candidates who are running in the 2022 state election and plan to run again in November. Hopper will run alongside the new Western Party, which aims to field candidates in seats in Melbourne’s west.

Their lawyer, Ron Merkle SC, said at a hearing in February that the nominated entity exemption should be revoked on the grounds that it was “issued solely for the benefit of the three successor parties”.

But the high court went further in its decision, declaring the entire Electoral Act, section 12, invalid on the grounds that it “impermissibly burdens” the freedom of political communication implied by the constitution.

Hopper told reporters Wednesday that he wasn’t surprised the high court went further than they wanted, calling the laws a “mess.”

“What they did was send a clear message to the Victorian government that everything should be fair and there should be a level playing field,” he said.

Lowe said the case may never make it to the high court if the government lifts the nominated entity exception, as it requested in a letter sent in 2024.

“They stuck with it for two years because they wanted to protect their own authority, and we deeply challenged that,” he said.

“Yes, there is work to be done, but the state government probably should have done that work in the first place.”

Both the opposition and the Greens expressed concern that the decision effectively removed all safeguards ahead of the election.

Shadow attorney general James Newbury said: “This is a huge problem for the integrity of our electoral system. We no longer have an effective donations system, no caps and no limits on foreign donations.”

“Obviously this will be a concern for Victorians and we will, in good faith, work with the government at this time to help fix this.”

Greens leader Ellen Sandell also called on the government to take immediate action to cap donations to prevent a US-style system where “billionaires and big corporations can buy politicians and elections”.

“If Labor does not act immediately to cap donations to political parties, they will be giving big corporate interests and billionaires the power to influence this year’s state elections,” he said.

Victorian premier Jacinta Allan said on Wednesday the government would need time to consider the decision.

Speaking to reporters after the oath ceremony of the cabinet at the Government House, Allan said, “The decision was made while addressing you today, so it would not be appropriate for me to comment.”

The federal government is facing challenges to its campaign finance laws from former independent MPs Zoe Daniel and Rex Patrick on similar grounds.

Center for Public Integrity chief executive Catherine Williams said the Victorian decision sent a clear warning to governments across Australia.

“Today’s decision makes clear: Governments cannot change election laws to favor the major parties and expect to get away with it,” he said, adding that Victoria must now pursue “real reform, not cosmetic change”.

This was echoed by Bill Browne of the Australia Institute, who said the decision gave the state government “a chance to go back to the drawing board” to design a fairer system.

He also said it had brought the federal and South Australian governments “under notice”.

“If these laws are not changed to make them fairer, there is a risk that they too will be repealed,” Browne said.