The High Court of Australia ruled Victoria’s political donation laws unconstitutional, striking down the entire section of the Electoral Act that included donation caps while exempting major parties through nominated entities.

The Victorian High Court unanimously found the campaign-funding framework unconstitutional, invalidating both the donation cap and the exemption for nominated entities that privileged established parties.

Stakeholders welcomed the decision as strengthening democracy and reducing the major-party duopoly, with commentators calling it a victory for electoral fairness.

Nominated entities are currently registered only for the Liberal Party, Labor, and the National Party, leaving new or minor parties with practical barriers to access exemptions.

Lowe argued the exemption and arrangements amounted to an incumbency abuse and discrimination against independents and new parties; the government acknowledged a discriminatory deadline but argued removal would suffice to keep the laws standing.

Plaintiffs Paul Hopper, founder of the West Party, and Melissa Lowe, a Climate 200-backed teal candidate, brought the challenge after the 2022 state election and ahead of an anticipated November contest.

The case centers on two independent candidates who plan to contest the November election under the West Party, with Hopper planning seats in Melbourne’s west.

Observers noted the ruling as a warning against governments twisting electoral laws to favor major parties.

The decision could extend beyond Victoria, potentially scrapping spending and donation caps and prompting government action to restore a level playing field.

The 2018 reform aimed at reducing private-donor influence ended up privileging major parties, with current caps and the nominated-entity exemptions at issue.

Legal counsel argued that removing the nominated-entity exemption would have avoided the challenge, framing the law as a package deal that backfired when tested in court.

The ruling holds that the nominated-entity carve-out impermissibly burdens the constitution’s implied freedom of political communication, extending beyond plaintiffs’ initial challenge.