The High Court of Australia has unanimously struck down Victoria's political donations and expenditure regime, ruling that Part 12 of the Electoral Act 2002 unconstitutionally burdened the implied freedom of political communication by giving major parties access to mechanisms unavailable to independent candidates.
The challenge was brought by former independent candidates Paul Hopper and Melissa Lowe. At the heart of their case was the law's treatment of 'nominated entities,' a mechanism that allowed the Labor, Liberal, and National parties to make uncapped campaign contributions through affiliated organisations, while independents had no equivalent pathway.
The struck-down law capped individual donations at $4,970 per person per four-year election cycle. For the major parties, nominated entities effectively bypassed that ceiling entirely.
The ruling left Victoria temporarily without any valid donation disclosure obligations. As a consequence, the High Court held that all public funding paid to political parties under the invalidated regime since 2018 was unlawfully made.
Victoria moved quickly. In June, the state parliament introduced a replacement bill restoring donation caps at higher thresholds: $10,000 for the 2026 state election, and $7,500 thereafter. Prohibitions on foreign and anonymous donations were reinstated.
The ruling has cast a shadow over federal law. The Commonwealth's own political finance legislation, built on a similar nominated-entity mechanism, is scheduled to take effect from 1 January 2027. A separate legal challenge to the federal laws is already before the courts.
Constitutional law expert Professor Anne Twomey said the ruling was not surprising. 'The High Court has a history of not taking kindly to manipulative electoral campaign funding laws,' she said.
