Decision Date: January 29, 2019
Link: Case Summary Document
Citation: [2019] HCA 1
Acknowledgement:The Pemsel Case Foundation thanks The Australian Centre for Philanthropy and Nonprofit Studies for its contribution in the drafting of this Case Note.


This case answered the following question in the affirmative:

Is s 29(10) of the Electoral Funding Act 2018 (NSW) (the EF Act) invalid because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution?

The High Court was also asked to rule on the constitutionality of section 35 of the EF Act, but it was held not necessary to do so in light of the invalidity of Section 29(10).

Section 29(10) of the EF Act provided that the cap on electoral expenditure applying to third-party campaigners registered before the commencement of the capped State expenditure period was to be $500,000. This was a reduction from the previous cap of $1,050,000 under earlier legislation.

The plaintiffs were a collection of trade union bodies. The first plaintiff, Unions NSW, is a peak body consisting of certain unions or branches of unions with members in New South Wales and is the ‘State peak council’ for employees for the purposes of the Industrial Relations Act 1996 (NSW) (IR Act). Each of the second, third, fifth and sixth plaintiffs were organisations of employees formed for the purposes of the IR Act. The fourth plaintiff was a federally registered association of employees under the Fair Work (Registered Organisations) Act 2009 (Cth), with a State branch registered under Ch 5, Pt 3, Div 1 of the IR Act. All but the sixth plaintiff were registered as a third-party campaigner under the EF Act for the New South Wales State election scheduled for March 2019. With respect to that election the capped State expenditure period commenced on 1 October 2018.

The plaintiffs were concerned about the effect of section 29(10) of the EF Act because in previous elections they had spent more than the cap now permitted. In the March 2015 election campaign, which was regulated by the previous Election Funding, Expenditure and Disclosures Act 1981 (NSW) (EFED Act), three of the plaintiffs spent more on electoral communication expenditure than would now be permissible under the EF Act. The first plaintiff had spent $719,802.81 in electoral communication expenditure. The second plaintiff, the New South Wales Nurses and Midwives’ Association, had spent $907,831.22. The third plaintiff, the Electrical Trades Union of Australia, New South Wales Branch, had spent $793,713.14.

Kiefel CJ, Bell and Keane JJ (with who the other justices agreed, though in separate judgements) held that there could be ‘no doubt’ about the answer to the question posed (at [15]). In Lange v Australian Broadcasting Corporation [1997] HCA 25 it was declared that ‘each member of the Australian community has an interest in disseminating and receiving information, opinions and arguments concerning government and political matters’. That freedom is implied by the provision the Commonwealth Constitution makes for representative government and the choice to be made by the people. The validity of a statutory provision which restricts or burdens that freedom depended upon the answers to questions posed in Lange.

It was held that the capping of both political donations and electoral expenditure by third party campaigners restricted the ability of a person or body to communicate to others. Moreover, the reduction in the spending cap was not ‘reasonably necessary’ to achieve the purpose identified by the NSW government, which was to prevent the drowning out of other voices in the political process by the distorting influence of money. The purpose of the legislation was legitimate, but the method to achieve that purpose was not.

Therefore, it was held that the $500,000 spending cap on third-party contributions to the election process was not valid. There was no ‘privileged position’ for political parties in election campaigns such that a cap of $500,000 on third party campaigning was necessary (at [40]):

The requirement of ss 7 and 24 of the Constitution that the representatives be “directly chosen by the people” in no way implies that a candidate in the political process occupies some privileged position in the competition to sway the people’s vote simply by reason of the fact that he or she seeks to be elected. Indeed, to the contrary, ss 7 and 24 of the Constitution guarantee the political sovereignty of the people of the Commonwealth by ensuring that their choice of elected representatives is a real choice, that is, a choice that is free and well-informed. Because the implied freedom ensures that the people of the Commonwealth enjoy equal participation in the exercise of political sovereignty, it is not surprising that there is nothing in the authorities which supports the submission that the Constitution impliedly privileges candidates and parties over the electors as sources of political speech.

This means that the March 2019 NSW election will proceed without caps on expenditure which are differential as between political candidates and third-party campaigners. Moreover, there will be no restriction on the combination of third-party voices to spend as much as is considered necessary. This will no doubt have importance not just for unions, but for other third party campaigners, such as charities.

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