Thursday 31 January 2019

Australian High Court rejects NSW Berejiklian Government's 2018 electoral funding reforms


In May 2018 the NSW Berejiklian Government announced plans to cap election-related spending by unions, environmental groups, and churches at a maximum of $500,000. 

The Electoral Funding Act 2018 No 20 came into force on 1 July 2018.


Australian Financial Review, 29 January 2019:

In July 2018, the Berejiklian Government reduced the amount that unions and other third parties could spend in the six months before an election from $1.05 million to $500,000. A political party and it candidates, however, can spend up to $22.6 million if it stands candidates in all 93 seats.

The High Court said NSW proved that aiming to "prevent the drowning out of voices in the political process by the distorting influence of money" was a legitimate purpose.

However, it said "the reduction in the cap applicable to third-party campaigners was not demonstrated to be reasonably necessary to achieve that purpose".

The court did not accept NSW's argument that $500,000 was still a substantial sum that would allow third parties to "reasonably present their case".

The lead judgement of Chief Justice Susan Kiefel and Justices Virginia Bell and Patrick Keane said "no enquiry as to what in fact is necessary to enable third-party campaigners reasonably to communicate their messages appears to have been undertaken".

The reforms also sought to ban third parties from acting "in concert" by pooling money into multi-million-dollar campaigns, such as the "Stop the Sell-off" campaign against energy privatisation for the 2015 poll. Those who breach the act would have faced up to 10 years' jail.

Former Commonwealth solicitor-general Justin Gleeson SC was lead counsel for Unions NSW and the five unions which also signed up for the challenge.

BACKGROUND

HIGH COURT OF AUSTRALIA, Judgment Summary, 18 December 2018:

UNIONS NSW & ORS v STATE OF NEW SOUTH WALES [2013] HCA 58

Today the High Court unanimously held that ss 96D and 95G(6) of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) ("the EFED Act") are invalid because they impermissibly burden the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution.

Section 96D of the EFED Act prohibits the making of a political donation to a political party, elected member, group, candidate or third-party campaigner, unless the donor is an individual enrolled on the electoral roll for State, federal or local government elections. The EFED Act also caps the total expenditure that political parties, candidates and third-party campaigners can incur for political advertising and related election material. For the purposes of this cap, s 95G(6) of the EFED Act aggregates the amount spent on electoral communication by a political party and by any affiliated organisation of that party. An "affiliated organisation" of a party is defined as a body or organisation "that is authorised under the rules of that party to appoint delegates to the governing body of that party or to participate in pre-selection of candidates for that party (or both)".

Each of the plaintiffs intends to make political donations to the Australian Labor Party, the Australian Labor Party (NSW Branch) or other entities, and to incur electoral communication expenditure within the meaning of the EFED Act. The second, third and sixth plaintiffs are authorised to appoint delegates to the annual conference of the Australian Labor Party (NSW Branch) and to participate in the pre-selection of that party's candidates for State elections. A special case stated questions of law for determination by the High Court.

The High Court unanimously held that ss 96D and 95G(6) burdened the implied freedom of communication on governmental and political matters. The Court held that political communication at a State level may have a federal dimension. The Court accepted that the EFED Act had general anti-corruption purposes. However, the Court held that the impugned provisions were not connected to those purposes or any other legitimate end.

· This statement is not intended to be a substitute for the reasons of the High Court or to be used in any later consideration of the Court’s reasons

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