State political donation laws struck out by High Court
In a situation that could have national ramifications, one state’s political donation and campaign finance laws have been deemed constitutionally invalid.
In a landmark 71-page decision handed down on Wednesday, the Supreme Court struck down Victoria’s first political donations rules in Australia.
The court found that section 12 of the Electoral Act, which regulates political donations and election expenditure, “imposes an impermissible burden” on the freedom of political communication implied in the Australian constitution.
Victorian Labor introduced donation caps in 2018, limiting individual payments to candidates and parties to less than $5,000 per term.
But the Labour, Liberal and National parties were still allowed to withdraw unlimited sums from their respective fundraising bodies, known as nominated organisations.
Western Party candidate Paul Hopper and former independent candidate Melissa Lowe challenged the constitutional validity of the laws, while other parties and independents were unable to establish their own candidate organizations.
“All Australian voters want is a level playing field,” Mr Hopper said.
“The Supreme Court has accepted that the two major parties rigged the system to stop new parties and independents.”
The Victorian government was ordered to pay costs to Mr Hopper and Ms Lowe.
Premier Jacinta Allan said the state Labor government would consider the High Court’s decision before responding.
“It would not be appropriate for me to comment without both reviewing the decision and getting advice,” he told reporters after his new cabinet was sworn in.
In December, Ms. Allan announced a bill that would allow minor parties and independents to form their own candidate organizations and limit transfers from such funds to $500,000 for all parties and $50,000 for independent candidates each election cycle.
But the reforms were quietly scrapped before the law was passed by both houses of the state parliament in March.
South Australia, NSW and Queensland followed Victoria in imposing limits on political donations.
There are no caps on political donations or spending at the federal level.
According to reforms adopted in 2025, the amount a person can donate to a party branch will be limited to $50,000 in a calendar year, and election spending for political parties across the country will be limited to $90 million.
The federal political donations law changes are not scheduled to go into effect until early 2027.
