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The political donation and campaign finance regulations of a state have been struck down, a decision that may resonate across the nation.
A court has determined that Part 12 of the Electoral Act, which governs political donations and election expenditures, places an “impermissible burden” on the implied freedom of political communication guaranteed by the Australian constitution.
In 2018, the Victorian Labor government introduced caps on donations, restricting individual contributions to candidates and parties to less than $5,000 each election cycle.
However, the Labor, Liberal, and National parties were still permitted to access unlimited funds from their designated fundraising organizations, referred to as nominated entities.
This privilege was not extended to other parties and independent candidates, prompting a legal challenge from West Party candidate Paul Hopper and former independent candidate Melissa Lowe, who questioned the constitutional validity of these laws.
“All Australian voters want, is a level playing field,” Hopper said.
“The High Court has recognised that the two major parties have been rigging the system to stop new parties and independents.”
The Victorian government was ordered to pay costs to Hopper and 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 also seeking advice,” she told reporters after her new cabinet was sworn in.
In December, Allan announced a bill to allow smaller parties and independents to set up their own nominated entities and cap transfers from such funds at $500,000 for all parties and $50,000 for independent candidates over each election cycle.
However, the reforms were quietly dumped before the legislation passed both houses of state parliament in March.
South Australia, NSW and Queensland have followed Victoria in implementing caps on political donations.
There remains no cap on political donations or spending at the federal level.
Under reforms passed in 2025, the amount an individual can donate to a party’s branch will be capped at $50,000 in a calendar year and election spending limited to $90 million for political parties nationwide.
The federal political donation law changes are not slated to take effect until the start of 2027.