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”.
They rejected the notion that parliament did not need to provide evidence for the legislation: “The Parliament may have choices but they have to be justifiable choices where the implied freedom is concerned.”
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.
He told the court there was “a longstanding concern on the conservative side of politics that trade unions provide an unfair advantage to the Labor Party”.
Mr Gleeson suggested the new provisions went too far.
“They say your cap as a third-party campaigner has to be set so low that you do not, as they call it, drown out the privileged participants …
“So the party and its candidates can potentially spend up to $22.6 million [$11.3 million in total each) and yet it is said these other valuable participants in the debate must be capped at $500,000 for some reason of avoiding drowning out. “
The cap for individual party candidates is $100,000, while the party itself is allowed to $100,000 times the number of electoral districts. The laws allow for a party to spend $50,000 of its party cap on a particular electorate.
The state election will be held on Saturday March 23.
Over the past decade there have been numerous changes to NSW donations laws and three successful High Court challenges.
In 2009, Labor banned donations from property developers and in 2010 extended that to tobacco, liquor and gambling entities. They also introduced caps of $5000 for donations to parties and $2000 for candidates. Major parties could spend up to $9.3 million, while smaller parties and third party campaigners could spend $105 million.
In 2012, the Coalition Government banned all political donations from those not on the electoral roll, which covered both unions and corporations. The High Court upheld a challenge to those laws by unIons NSW in 2013. The unions did not object to the $1.05 million cap.
In 2015, the High Court upheld a ban on developer donations as a “legitimate means of pursuing the legitimate objective of removing the risk and perception of corruption and undue influence in NSW politics”.
The latest case was seen as a test of how far caps could be employed in the name of creating a level playing field for spending on elections.
In March, the High Court will a challenge to new Queensland lawsthan ban political donations from developers by Gary Spence. Mr Spence resigned as Linerl National Party president in December, saying he feared his position as chairman of engineering consultancy firm PeakUrban would make him a “prohibited donor”.