High Court Strikes Down Victoria's Campaign Funding Laws

The High Court of Australia has unanimously invalidated key sections of Victoria's campaign funding laws, finding they placed an impermissible burden on the implied freedom of political communication. The decision, handed down by all seven judges, removes donation caps and public funding provisions that had been in place since 2018. The ruling stems from a legal challenge brought by two independent candidates and has immediate implications for the state's next election, scheduled for November 2026.

The Court's Ruling

The High Court found that provisions within the Victorian Electoral Act 2002 concerning "nominated entities" were unconstitutional.

• The court determined that a special exemption for these entities "impermissibly burdens" the Constitution's implied freedom of political communication.
• The judges ruled that because the arrangements for nominated entities were integral to the laws passing parliament, the entire relevant section of the Act was invalid.
• This invalidated section established caps on political donations and imposed associated disclosure requirements.

Background of the Laws and Challenge

The challenged laws were introduced in 2018 with the stated aim of reducing corruption and undue influence by shifting state campaigns toward greater public funding.

• The legislation capped campaign donations at $4,970 for individuals and organizations.
• However, it provided an exemption for funds transferred to registered political parties through their "nominated entities."
• Only the Liberal Party, Labor Party, and National Party had nominated entities registered with the Victorian Electoral Commission.
• Financial disclosures show that between 2022 and 2025, the Liberal Party received $7.07 million from the Cormack Foundation, and the Australian Labor Party received $5.38 million from Labor Services & Holding, through these entities.

The constitutional challenge was brought by independent candidates Paul Hopper and Melissa Lowe, who contested the 2022 Victorian state election and plan to stand again in 2026.

They were represented by former judge Ron Merkel, SC.

Statements from Involved Parties

Paul Hopper, an independent candidate, stated:

"All Australian voters want is a level playing field. The High Court has recognised that the two major parties have been rigging the system to stop new parties and independents."

Melissa Lowe, another independent candidate, said the decision found a "chink in the armour" of the major party duopoly and called it a "great day for democracy."

The Centre for Public Integrity, an independent think tank, welcomed the ruling. Its executive director, Catherine Williams, stated it confirms concerns that the laws unfairly advantaged major parties and puts governments "firmly on notice."

Solicitor Kiera Peacock of Ripple Legal, who took the case to the High Court, noted the plaintiffs had written to the Victorian government in 2024 asking for the nominated entity exception to be removed to avoid litigation.

Peacock stated the decision went beyond what her clients had asked for and could have been avoided had the government agreed to amend the laws.

Implications and Next Steps

The ruling has several immediate consequences:

• The Victorian government must decide whether to attempt to redesign its campaign financing laws or allow the 2026 state election to proceed without the previous donation caps and public funding model.
• An independent review of the laws, commissioned by the government, recommended in 2024 that the carve-out for nominated entities be abolished.
• The decision removes the previous financial framework, which critics argued advantaged the major parties. This potentially alters the funding landscape for independents and new parties.
• The judgment may be examined by the federal government, which faces a separate High Court challenge to its campaign finance laws on similar grounds brought by former independent MPs Zoe Daniel and Rex Patrick.