Former lord mayor of Newcastle and developer Jeff McCloy has taken his fight against a ban on political donations from developers in New South Wales to the High Court of Australia.

Mr McCloy is embroiled in an investigation by the Independent Commission Against Corruption (ICAC), over donations of more than $30,000 to candidates in the 2011 state election.

His lawyers told the High Court the law was at odds with the implied freedom of political communication in the constitution and does nothing to prevent corruption.

But lawyers for the NSW Government and the ICAC said political communication was not impeded by the law which only targets the source of funds from a group with a great deal to gain from influencing political decisions.

Judges on the High Court bench today queried why the law does not extend to local governments.

The court heard the omission of local governments simply showed that the scheme was not comprehensive.

The High Court has also been asked to look at the state's cap on donations for certain groups, and the ban on indirect donations.

Lawyers for Mr McCloy argued the law also prevented the tobacco, liquor and gambling industry from making political donations.

But in their submissions to the High Court they said it was wrong to ban a particular class of voters, particularly when the measure has no connection or was disproportionate to a legitimate end.

The submissions suggested the law does not achieve its aim of preventing corruption.

But lawyers for the State Government said in their submissions that was wrong and the law was appropriately aimed at that legitimate end.

They said the law only sought to control the source of the donations, not the communication between voters and legislators.

They also said developers were more vulnerable to the decisions of Government and are in a different class to others, and in addition make up a significant proportion of the complaints to the ICAC.

This was disputed by Mr McCloy's legal team, who said the state could only come up with eight examples over the last 25 years.

But the Government said this was a significant number.

Questions raised in the landmark 1997 Lange case on the freedom of political communication will be key to the High Court's ruling.