McCloy v New South Wales [2015] HCA 34: Political Donations

Provisions which impose caps on political donations, prohibiting donations from property developers, and restricting direct campaign contributions in the New South Wales Election Funding, Expenditure and Disclosure Act 1981 have been upheld by the High Court in  McCloy  v State of New South Wales [2015] HCA 34.

Background

The first and third plaintiffs are property developers whereas the second plaintiff had made a direct campaign contribution within the meaning of the Act. The plaintiffs had all intended to make donations to a political campaign that exceeded the cap prescribed in Division 2A of Part 6 of the Act. Consequently, the plaintiffs challenged these specific provisions of the Act including Division 2A and 4A (prohibiting donations from property developers) of Part 6 on the grounds that these provisions breached the implied freedom of political communication in the Australian Constitution.

The basis of the challenge was that the provisions impermissibly restrict the funds that may be available to political parties and candidates to meet the costs involved in political communication. They further argued that the restrictions impeached on their ability to gain access to and make representations of their concerns to political parties.

High Court Decision

 The High Court agreed with the plaintiff that the provisions concerned did indirectly burden political communication in the manner alleged. However, the Court was of the opinion that the provisions were nevertheless a legitimate means by which the legitimate objective of removing the risk and perception of corruption and undue influence in NSW politics was maintained. The Court felt that the benefits of the provisions outweighed the detriments as the provisions helped to enhance the system of representative government. Furthermore, the Court looked to the history of political corruption by property developers in NSW and found that the restrictions imposed by Division 4A were also valid. 

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McCloy v State of New South Wales [2015] HCA 34