High Court Finds NSW Election Third Party Donation Cap Law Invalid

Tuesday 12 February 2019 @ 11.29 a.m. | Judiciary, Legal Profession & Procedure | Legal Research

In Unions NSW v New South Wales [2019] HCA 1, the High Court has unanimously held that subsection 29(10) of the Electoral Funding Act 2018 (NSW) (‘the EF Act’) is invalid.


The EF Act replaced the Election Funding, Expenditure and Disclosures Act 1981 (NSW) (‘the EFED Act’), and its provisions will apply for the next NSW State election in March 2019. Its aim is to maintain schemes set up under the EFED, in particular in regards to disclosure, donation caps, expenditure limits and public funding. Under s 29(10) of the EF Act, the expenditure cap for registered third-party campaigners was reduced from $1,050,000 to $500,000. Furthermore, s 35 of the EF Act prohibits third-party campaigners to band together in order to extend the applicable cap.

The plaintiffs were a collection of trade union bodies, with the sixth plaintiff being a registered third-party campaigner under the EF Act. The plaintiffs commenced proceedings shortly after the EF Act came into effect, and the parties agreed to a special case for consideration by the High Court. The plaintiffs sought declarations of invalidity in regards to ss 29(10) and 35 of the EF Act.


There were three questions to be answered by the High Court of Australia, and their decision was as follows:

“The questions stated by the parties for the consideration of the Full Court be answered as follows:

  1. Is s 29(10) of the Electoral Funding Act 2018 (NSW) invalid because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution?
  2. Is s 35 of the Electoral Funding Act 2018 (NSW) invalid (in whole or in part and, if in part, to what extent), because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution?
    Unnecessary to answer.
  3. Who should pay the costs of the special case?
    The defendant.”

As summarised at [1]:

“The plaintiffs contend that each of the provisions effecting these changes is invalid because it impermissibly burdens the implied freedom of communication on matters of politics and government which is protected by the Constitution.”

The plaintiffs accepted that one of the purposes of the EF Act is to prevent the influence of money in the political process. However, they argued that s 29(10) serves a further purpose, that is to advantage the voice of political parties over third-party campaigners, and so infringing on their Constitutional freedom.

The defendant submitted at [39] that:

“candidates and political parties occupy a constitutionally distinct position which legitimises the preferential treatment of candidates and political parties relative to others who are not directly seeking to determine who shall be elected to Parliament or form government.”

This argument was rejected by the High Court. Under sections 7 and 24 of the Constitution, candidates were not to occupy a privileged position in an effort to sway the people’s vote. On the contrary, these sections were a guarantee of political sovereignty to ensure that the choice of the people is a free and well-informed choice.

In their decision, the High Court accepted that the identified purpose of s 29(10) was to guard against domination of election campaigns as presented by the defendant. However, in assessing the section and referencing an expert panel report released by the Joint Standing Committee on Electoral Matters, the majority held that the reduction in the expenditure cap was not demonstrated to be reasonably necessary to achieve this purpose. The High Court was not satisfied with the evidence presented that such a reduction in the cap was necessary. Gageler J at [102] further commented that:

“[w]ithout satisfaction that the amount of the cap is justified, the imposition of the cap in that amount stands unjustified.”

Therefore, s 29(10) was held to be invalid. Furthermore, the majority deemed it unnecessary to answer the question concerning s 35 as there was no applicable cap for this section to operate on.

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Unions NSW v New South Wales [2019] HCA 1

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