Victoria's Political Donation Laws Declared Unconstitutional by High Court
In a landmark decision with far-reaching implications, the High Court of Australia has unanimously ruled that Victoria's political donation laws are unconstitutional. This ruling effectively leaves the state without any limits on political donations or disclosure requirements, unless new legislation is urgently introduced before the November state election.
Unanimous Decision Strikes Down Key Electoral Provisions
The unanimous decision, handed down by Australia's highest court on Wednesday, struck out an entire section of Victoria's Electoral Act that had introduced caps on political donations but contained a controversial exemption for major political parties. The court declared that Part 12 of the Electoral Act was invalid as it "impermissibly burdens" the constitution's implied freedom of political communication.
Victoria's laws, which were introduced in 2018 and came into effect ahead of the 2022 election, had capped campaign donations at $4,970 per individual per term but provided an exemption for funds transferred to registered political parties through their "nominated entities." The only parties with nominated entities registered with the Victorian Electoral Commission were Labor, and the Liberal and National parties.
Premier Warns of "Dark Money" from Foreign Billionaires
Victorian Premier Jacinta Allan expressed grave concerns about the ruling, stating that it leaves state politics exposed to "dark money from foreign billionaires." She promised to introduce legislation to restore the electoral integrity regime within the limits of the court's ruling.
"We can't allow anyone to exploit this current period to solicit huge donations and move money around secretly," Premier Allan said on Wednesday night. "Our legislation will make sure that every party and every candidate will be accountable for every dollar they receive from this day onwards."
Case Brought by Independent Candidates
The case was brought by Paul Hopper and Melissa Lowe, two independent candidates who contested the 2022 state election and plan to stand again in November. Hopper will run with the new West Party, which intends to field candidates in seats in Melbourne's west.
Their counsel, Ron Merkle SC, had told a hearing in February that the nominated entity exemption should be scrapped as it was "solely enacted for the benefit of the three legacy parties." However, the High Court went further than requested, declaring the entire section invalid.
Hopper told reporters he was not shocked by the court's broader ruling, describing the laws as a "mess." "What they've done is send a clear message to the government of Victoria that things have to be fair and there has to be a level playing field," he said.
Opposition and Greens Raise Alarm About Election Integrity
Both the opposition and the Greens have raised serious concerns that the ruling effectively removes all safeguards on political donations ahead of the November election.
Shadow Attorney General James Newbury stated: "This is a very big problem for the integrity of our electoral system. We now have effectively no donation system, no caps and no limits on foreign donations. Clearly that would be a concern to Victorians and we in good faith would work with the government right now on helping to make sure that's fixed."
Greens leader Ellen Sandell urged 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." She warned: "If Labor doesn't take immediate action to cap donations to political parties, they're giving big corporate interests and billionaires free rein to influence this year's state election."
Timing Creates Campaign Funding Free-for-All
Despite Premier Allan's promise to introduce new legislation, it will not be presented to parliament before the Nepean byelection on May 2, leaving the final weeks of that campaign without any donation restrictions. This creates what critics describe as a funding free-for-all during a crucial electoral period.
Broader Implications for Australian Campaign Finance Laws
The ruling is likely to have major implications beyond Victoria, affecting similar campaign finance laws introduced by the South Australian and federal governments. The federal government is already facing a challenge to its campaign finance laws on similar grounds by former independent MPs Zoe Daniel and Rex Patrick.
Catherine Williams, executive director of the Centre for Public Integrity, said the Victorian decision sent a clear warning to governments across Australia. "Today's judgment makes it clear: governments cannot rig electoral laws in favour of major parties and expect to get away with it," she said, adding that Victoria must now pursue "genuine reform – not cosmetic change."
Bill Browne from the Australia Institute echoed this sentiment, stating that the decision gave the state government a "chance to go back to the drawing board" to design a fairer system. He warned that the ruling also put the federal and South Australian governments "on notice," adding: "If these laws are not amended to make them fairer, they risk being struck down as well."
Independent Candidates Criticize Government's Response
Melissa Lowe, one of the independent candidates who brought the case, criticized the government's handling of the issue. She noted that if the government had scrapped the nominated entity exception as they had requested in a letter sent in 2024, the case would never have made it to the High Court.
"They clung to it for two years because they wanted to protect their own incumbency and we've deeply challenged that," Lowe said. "Yes, there's work that needs to be done but the state government probably should have done that work in the first place."
The High Court's decision has created an unprecedented situation in Victoria's political landscape, with all parties now operating without donation restrictions as the state prepares for a crucial election. The coming months will test the government's ability to craft new legislation that balances electoral integrity with constitutional requirements while preventing what many fear could be an influx of unlimited political donations.
