The High Court has taken an axe to the Victorian Electoral Act, chopping out the entirety of Part 12.

It deals with election spending, caps on political donations, three different types of public funding (for election campaigns, party administration and policy development), along with the disclosure regime for donations.

The Victorian parliament will be scrambling to reconstruct and reenact it in a constitutionally valid manner in the lead up to the Victorian election in November this year.

What was the problem with the law?

Part 12 was struck down due to the constitutional invalidity of a seemingly obscure provision setting differential rules for “nominated entities”. But it was really about the constitutional validity of a law allowing the three main political parties to spend more on election campaigns than anyone else.

The High Court had previously held that legislative limits on political donations and electoral expenditure can reduce the amount of money a political party or candidate can spend on political communications during an election campaign.

This means such a law can breach the constitutionally implied freedom of political communication – unless the law is made for a legitimate purpose, such as reducing the risk of corruption and undue influence, and the law is reasonably appropriate and adapted to achieving that purpose.

In Victoria, the parliament passed amendments in 2018 that put a very low cap on political donations. A person could only make donations to a political party or any of its candidates or elected members, up to a cumulative maximum of A$4,000 (since raised to $4,970) over the entire four-year period between elections.

The law did not, however, place any cap on electoral spending, as long as the spending came out of a special campaign account. In effect, the limit on spending depended on what was paid into that campaign account. All donations and electoral public funding had to be paid into that account.

But what else........

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