McCloy v New South Wales [2015] HCA 34 (7 October 2015)

Last Updated: 4 December 2015

HIGH COURT OF AUSTRALIA

FRENCH CJ,



KIEFEL, BELL, GAGELER, KEANE, NETTLE AND GORDON JJ

JEFFERY RAYMOND McCLOY & ORS PLAINTIFFS

AND

STATE OF NEW SOUTH WALES & ANOR DEFENDANTS

McCloy v New South Wales



[2015] HCA 34



7 October 2015



S211/2014

ORDER

The questions stated by the parties in the special case dated 28 January 2015 and referred for the opinion of the Full Court be answered as follows:

Question 1

Is Division 4A of Part 6 of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid (in whole or in part and, if in part, to what extent) in its application to the plaintiffs because it impermissibly burdens the implied freedom on communication on governmental and political matters contrary to the Commonwealth Constitution?

Answer

In so far as Division 4A prohibits the making by a property developer of a political donation or acceptance of a political donation from a property developer, it is not invalid. It does not impermissibly burden the implied freedom of communication on governmental and political matters contrary to the Constitution.

Question 2

Is Division 2A of Part 6 of Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid (in whole or in part and, if in part, to what extent) in its application to the plaintiffs because it impermissibly burdens the implied freedom of communication of governmental and political matters contrary to the Commonwealth Constitution?

Answer

No.

Question 3

Is s 96E of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid in its application to the plaintiffs because it impermissibly burdens the implied freedom of communication of governmental and political matters contrary to the Commonwealth Constitution?

Answer

No.

Question 4

Who should pay the costs of the special case?

Answer

The plaintiffs.

Representation

D M J Bennett QC with I D Faulkner SC, A K Flecknoe-Brown and B A Mee for the plaintiffs (instructed by Toomey Pegg Lawyers)

M G Sexton SC, Solicitor-General for the State of New South Wales and J K Kirk SC with A M Mitchelmore for the first defendant (instructed by Crown Solicitor (NSW))

Submitting appearance for the second defendant

Interveners

J T Gleeson SC, Solicitor-General of the Commonwealth with C L Lenehan for the Attorney-General of the Commonwealth, intervening (instructed by Australian Government Solicitor)

G R Donaldson SC, Solicitor-General for the State of Western Australia with K A T Pedersen for the Attorney-General for the State of Western Australia, intervening (instructed by State Solicitor (WA))

P J Dunning QC, Solicitor-General of the State of Queensland with A D Keyes for the Attorney-General of the State of Queensland, intervening (instructed by Crown Law (Qld))

M G Evans QC with D F O'Leary for the Attorney-General for the State of South Australia, intervening (instructed by Crown Solicitor (SA))

K L Walker QC with A D Pound for the Attorney-General for the State of Victoria, intervening (instructed by Victorian Government Solicitor)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

McCloy v New South Wales

Constitutional law – Implied freedom of communication on governmental and political matters – Provisions of Election Funding, Expenditure and Disclosures Act 1981 (NSW) impose cap on political donations, prohibit property developers from making such donations, and restrict indirect campaign contributions – Whether provisions impermissibly burden implied freedom of political communication.

Words and phrases – "appropriate and adapted", "deference", "implied freedom of communication on governmental and political matters", "margin of appreciation", "proportionality".

Constitution, ss 7, 24, 62, 64, 128.



Election Funding, Expenditure and Disclosures Act 1981 (NSW), Pt 6, Divs 2A, 4A, s 96E.

FRENCH CJ, KIEFEL, BELL AND KEANE JJ.

Introduction

The Election Funding, Expenditure and Disclosures Act 1981 (NSW) ("the EFED Act") imposes restrictions on private funding of political candidates and parties in State and local government elections in New South Wales. The plaintiffs contend in this special case that provisions of the EFED Act, which impose a cap on political donations, prohibit property developers from making such donations, and restrict indirect campaign contributions, are invalid for impermissibly infringing the freedom of political communication on governmental and political matters (hereinafter "the freedom"), which is an implication from the Australian Constitution. As explained in the reasons that follow, the question whether an impugned law infringes the freedom requires application of the following propositions derived from previous decisions of this Court and particularly Lange v Australian Broadcasting Corporation [1] and Coleman v Power [2] The freedom under the Australian Constitution is a qualified limitation on legislative power implied in order to ensure that the people of the Commonwealth may "exercise a free and informed choice as electors." [3] Constitution provides, where the extent of the burden can be justified as suitable, necessary and adequate, having regard to the purpose of those restrictions. The question whether a law exceeds the implied limitation depends upon the answers to the following questions, reflecting those propounded in Lange as modified in Coleman v Power: Does the law effectively burden the freedom in its terms, operation or effect?

If "no", then the law does not exceed the implied limitation and the enquiry as to validity ends.

If "yes" to question 1, are the purpose of the law and the means adopted to achieve that purpose legitimate, in the sense that they are compatible with the maintenance of the constitutionally prescribed system of representative government [4]

The answer to that question will be in the affirmative if the purpose of the law and the means adopted are identified and are compatible with the constitutionally prescribed system in the sense that they do not adversely impinge upon the functioning of the system of representative government.

If the answer to question 2 is "no", then the law exceeds the implied limitation and the enquiry as to validity ends.

If "yes" to question 2, is the law reasonably appropriate and adapted to advance that legitimate object [5]

The proportionality test involves consideration of the extent of the burden effected by the impugned provision on the freedom. There are three stages to the test – these are the enquiries as to whether the law is justified as suitable, necessary and adequate in its balance in the following senses:

suitable — as having a rational connection to the purpose of the provision[6];

necessary — in the sense that there is no obvious and compelling alternative, reasonably practicable means of achieving the same purpose which has a less restrictive effect on the freedom;

adequate in its balance — a criterion requiring a value judgment, consistently with the limits of the judicial function, describing the balance between the importance of the purpose served by the restrictive measure and the extent of the restriction it imposes on the freedom.

If the measure does not meet these criteria of proportionality testing, then the answer to question 3 will be "no" and the measure will exceed the implied limitation on legislative power.

As noted, the last of the three questions involves a proportionality analysis. The term "proportionality" in Australian law describes a class of criteria which have been developed by this Court over many years to determine whether legislative or administrative acts are within the constitutional or legislative grant of power under which they purport to be done. Some such criteria have been applied to purposive powers; to constitutional legislative powers authorising the making of laws to serve a specified purpose; to incidental powers, which must serve the purposes of the substantive powers to which they are incidental; and to powers exercised for a purpose authorised by the Constitution or a statute, which may limit or restrict the enjoyment of a constitutional guarantee, immunity or freedom, including the implied freedom of political communication. Analogous criteria have been developed in other jurisdictions, particularly in Europe, and are referred to in these reasons as a source of analytical tools which, according to the nature of the case, may be applied in the Australian context. Acceptance of the utility of such criteria as tools to assist in the determination of the limits of legislative powers which burden the freedom does not involve a general acceptance of the applicability to the Australian constitutional context of similar criteria as applied in the courts of other jurisdictions. It does not involve acceptance of the application of proportionality analysis by other courts as methodologically correct. The utility of the criteria is in answering the questions defining the limits of legislative power relevant to the freedom which are derived from Lange. As explained in the reasons that follow, while the impugned provisions effectively burden the freedom, they have been enacted for legitimate purposes. They advance those purposes by rational means which not only do not impede the system of representative government provided for by the Constitution, but enhance it. There are no obvious and compelling alternative, reasonably practicable means of achieving the same purpose. The provisions are adequate in their balance. The burden imposed on the freedom is therefore justified as a proportionate means of achieving their purpose. The substantive questions stated in the special case should be answered in favour of the validity of the impugned provisions and the plaintiffs should pay the costs of the special case.

The EFED Act

"The objects of this Act are as follows:



(a) to establish a fair and transparent election funding, expenditure and disclosure scheme,



(b) to facilitate public awareness of political donations,



(c) to help prevent corruption and undue influence in the government of the State,



(d) to provide for the effective administration of public funding of elections, recognising the importance of the appropriate use of public revenue for that purpose,



(e) to promote compliance by parties, elected members, candidates, groups, agents, third-party campaigners and donors with the requirements of the election funding, expenditure and disclosure scheme."

"(a) a property developer, or



(b) a tobacco industry business entity, or



(c) a liquor or gambling industry business entity,



and includes any industry representative organisation if the majority of its members are such prohibited donors."

The special case, as the plaintiffs acknowledge, is limited to the prohibition in Div 4A applying to property developers, not the other two classes of "prohibited donors". A "property developer" is defined in s 96GB(1) as:

"(a) a corporation engaged in a business that regularly involves the making of relevant planning applications by or on behalf of the corporation in connection with the residential or commercial development of land, with the ultimate purpose of the sale or lease of the land for profit,



(b) a person who is a close associate of a corporation referred to in paragraph (a)."

The other two classes of prohibited donors are also, in part, defined as corporations and their close associates[26].

A "relevant planning application" [27] Environmental Planning and Assessment Act 1979 (NSW) ("the EPA Act"), which covers a wide range of planning related applications under that Act [28] A "close associate" of a corporation is defined [29] The third plaintiff is a "property developer" within the meaning given to that term by the EFED Act. The first plaintiff is a director and "close associate" of the third plaintiff and therefore himself a "property developer" within the meaning of the EFED Act. The first plaintiff made donations of money to candidates for the March 2011 New South Wales State election. The second plaintiff, a corporation of which the first plaintiff is a director, made an "indirect campaign contribution" within the meaning of the EFED Act by way of payment towards the remuneration of a member of the campaign staff of a candidate for that election. Each of the plaintiffs intends, if permitted by law, to make donations in excess of $5,000 to the New South Wales division of a particular political party or to other political parties. The plaintiffs challenge the validity of Div 2A, Div 4A and s 96E. They submit that the ability to pay money to secure access to a politician is itself an aspect of the freedom and therefore the subject of constitutional protection. To the extent that the freedom may be abridged by laws which are proportionate to a legitimate end, one which is consistent with the system of representative government for which the Constitution provides [30]

The questions in this case

The following questions are stated by the parties for the opinion of the Court:

"1. Is Division 4A of Part 6 of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid (in whole or in part and, if in part, to what extent) in its application to the plaintiffs because it impermissibly burdens the implied freedom on communication on governmental and political matters contrary to the Commonwealth Constitution?

Is Division 2A of Part 6 of Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid (in whole or in part and, if in part, to what extent) in its application to the plaintiffs because it impermissibly burdens the implied freedom of communication of governmental and political matters contrary to the Commonwealth Constitution? Is s 96E of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid in its application to the plaintiffs because it impermissibly burdens the implied freedom of communication of governmental and political matters contrary to the Commonwealth Constitution? Who should pay the costs of the special case?" Section 96E is merely an anti-avoidance provision. Its purpose is to prevent political donations being made to a monetary value larger than the applicable cap by indirect means. Its validity depends upon that of Div 2A.

The effect on the freedom

The constitutional basis for the freedom is well settled. The Court was not invited by any party to reconsider the basis for the implication. Lange is the authoritative statement of the test to be applied to determine whether a law contravenes the freedom. All parties accepted that the Lange test was to be applied in this case to determine whether the impugned provisions of the EFED Act are consistent with the freedom. The only question, then, is as to what is required by the Lange test. In that regard, whether the impugned provisions are consistent with the freedom is to be determined, not by a side by side comparison of the challenged provisions with the text of ss 7, 24, 64 and 128 of the Constitution, nor by a determination of whether the impugned provisions are reasonably necessary in the pursuit of a purpose adjudged to be sufficiently important, nor by an impressionistic judgment as to whether the impugned provisions are consistent with the freedom. The Lange test requires a more structured, and therefore more transparent, approach. In the application of that approach it is necessary to elucidate how it is that the impugned law is reasonably appropriate and adapted, or proportionate, to the advancement of its legitimate purpose. Central to the questions posed by Lange [31] is how the EFED Act affects the freedom. In Unions NSW, it was accepted by the parties, and by the Court, that the provisions of the EFED Act effect a burden on the freedom [32] [33] s 96E, burden the freedom in this sense. It is, then, incumbent upon New South Wales to justify that burden, by reference to the requirements drawn from Lange. The plaintiffs contend that the provisions in question have a further effect on the freedom, namely upon the ability of donors to make substantial political donations in order to gain access and make representations to politicians and political parties. They accept, as they must, that the act of donation is not itself a political communication, but they submit that donors are entitled to "build and assert political power" and that this is an aspect of the freedom which has been recognised by this Court. Political influence may be acquired by many means, they say, and paying money to a political party or an elected member is but one. The words quoted by the plaintiffs and repeated above are taken from a passage in Archibald Cox's text [34] Australian Capital Television Pty Ltd v The Commonwealth [35] ACTV") and by the joint judgment in Unions NSW [36]

"Only by uninhibited publication can the flow of information be secured and the people informed ... Only by freedom of speech ... and of association can people build and assert political power".

In Unions NSW[37] this passage was referred to in order to explain the need for an unfettered exchange of ideas. It was said that persons other than electors have a legitimate interest in matters of government and may seek to influence who should govern. This was in the context of a provision which purported to restrict donors to being individuals who are enrolled as electors.

In ACTV, Mason CJ [38] [39] Constitution was that the rights of individuals were sufficiently secured by ensuring each an equal share in political power" (footnote omitted). Neither the passage from Archibald Cox nor the use made of it by this Court supports the plaintiffs' argument that the ability to make substantial donations is part of the freedom. To the contrary, guaranteeing the ability of a few to make large political donations in order to secure access to those in power would seem to be antithetical to the great underlying principle to which Professor Harrison Moore referred. In any event, what the plaintiffs identify is something in the nature of a personal right. The plaintiffs' argument appears to mistakenly equate the freedom under our Constitution with an individual right such as is conferred by the First Amendment to the United States Constitution, which operates in the field of political donations and is in the nature of both a right of political expression and a right of political association [40] It has repeatedly been explained, most recently in Unions NSW [41] that the freedom is not a personal right. In ACTV [42] EFED Act is not to be approached by viewing the restrictions it imposes upon the plaintiffs' ability to access politicians as a burden on the freedom. The relevant burden is that identified in Unions NSW.

Compatibility of the legitimate purpose and means with the Constitution?

Accepting that Div 2A and Div 4A burden the freedom, in the way explained in Unions NSW, the process of justification for which Lange provides commences with the identification of the statutory purpose or purposes. The other questions posed by Lange are not reached unless the purpose of the provisions in question is legitimate. A legitimate purpose is one which is compatible with the system of representative government provided for by the Constitution [43] [44]

Div 2A and s 96E

The plaintiffs' argument in support of their submission that the effect of Pt 6 of the EFED Act shows that its true legislative purpose is other than that described in s 4A of the EFED Act does not identify any matter which detracts from the view expressed in Unions NSW [45] Unions NSW as to the general purpose of the EFED Act. The fact that the words are not repeated in Div 2A or other parts of the EFED Act does not detract from that purpose. The provisions of Div 2A are most clearly directed to the object stated in s 4A(c), the prevention of "corruption and undue influence in the government of the State". The capping provisions of Div 2A are intended to reduce the risk of corruption by preventing payments of large sums of money by way of political donation. It may be accepted, as the plaintiffs submit, that the EFED Act targets money which may be used for political communication, but this is not inconsistent with a purpose to prevent corruption. The provisions of Div 2A, and those of the EFED Act more generally, may additionally have an ancillary purpose. They are also directed to overcoming perceptions of corruption and undue influence, which may undermine public confidence in government and in the electoral system itself. In a report of the Parliament of New South Wales Joint Standing Committee on Electoral Matters, which made recommendations as to capping [46] [47] [48] The plaintiffs submit that gaining access through political donations to exert persuasion is not undue influence. This mirrors what was said by Kennedy J, writing the opinion of the Court in Citizens United v Federal Election Commission [49] There are different kinds of corruption. A candidate for office may be tempted to bargain with a wealthy donor to exercise his or her power in office for the benefit of the donor in return for financial assistance with the election campaign. This kind of corruption has been described as "quid pro quo" corruption [50] [51] It has been said of the nature of the risk of clientelism that [52]

"unlike straight cash-for-votes transactions, such corruption is neither easily detected nor practical to criminalize. The best means of prevention is to identify and to remove the temptation."

Quid pro quo and clientelistic corruption threaten the quality and integrity of governmental decision-making, but the power of money may also pose a threat to the electoral process itself. This phenomenon has been referred to as "war-chest" corruption [53] [54] In R (Animal Defenders International) v Secretary of State for Culture, Media and Sport [55]

"This is achieved where, in public discussion, differing views are expressed, contradicted, answered and debated. ... It is not achieved if political parties can, in proportion to their resources, buy unlimited opportunities to advertise in the most effective media, so that elections become little more than an auction."

The plaintiffs' submission, that the relevant provisions of the EFED Act have as their true purpose the removal of the ability of persons to make large donations in the pursuit of political influence, would appear to confuse the effect of Div 2A, and other measures employed, with the overall purpose of these provisions. In so far as the submission also seeks to make the legitimacy of legislative purpose contingent upon consistency with a personal right to make political donations as an exercise of free speech, it appears once again to draw on First Amendment jurisprudence. In Austin v Michigan Chamber of Commerce [56] [57] Austin is now regarded as inconsistent with the primacy awarded by the First Amendment to an individual's right to free speech and has been overruled [58] That is not the case with respect to the Australian Constitution. As this Court said in Lange [59] ss 7, 24, 64 and 128 of the Constitution, and related provisions, necessarily imply a limitation on legislative and executive power in order to ensure that the people of the Commonwealth may "exercise a free and informed choice as electors." Sections 7 and 24 contemplate legislative action to implement the enfranchisement of electors, to establish an electoral system for the ascertainment of the electors' choice of representatives [60] [61] In ACTV it was accepted that the fact that a legislative measure is directed to ensuring that one voice does not drown out others does not mean that measure is illegitimate for that reason alone [62] [63] [64] In Harper v Canada (Attorney General) [65] [66]

"First, the State can provide a voice to those who might otherwise not be heard. ... Second, the State can restrict the voices which dominate the political discourse so that others may be heard as well."

Speaking of the provisions in question as seeking to create a "level playing field for those who wish to engage in the electoral discourse", his Honour observed that, in turn, this "enables voters to be better informed; no one voice is overwhelmed by another."

Equality of opportunity to participate in the exercise of political sovereignty is an aspect of the representative democracy guaranteed by our Constitution [67] ACTV, the law which was struck down was inimical to equal participation by all the people in the political process and this was fatal to its validity. The risk to equal participation posed by the uncontrolled use of wealth may warrant legislative action to ensure, or even enhance, the practical enjoyment of popular sovereignty [68] The risks that large political donations have for a system of representative government have been acknowledged since Federation. Part XIV of the Commonwealth Electoral Act 1902 (Cth) contained certain limits on expenditure in electoral campaigns and would appear to have been based upon the Corrupt and Illegal Practices Prevention Act 1883 (UK) [69] [70]

"if its provisions are honestly carried out, the length of a man's purse will not, as now, be such an important factor; and the way will be opened for many men of talent, with small means, to take part in the government of the country".

Capping of political donations is a measure which has been adopted by many countries with systems of representative government[71]. It is a means that does not impede the system of representative government for which our Constitution provides.

The purpose of Div 2A and the means employed to achieve that purpose are not only compatible with the system of representative government; they preserve and enhance it.

Div 4A

The plaintiffs submit that the prohibitions in Div 4A cannot be based upon any rational perceived risk that property developers are more likely to make corrupt payments than others. Whilst they accept that the commercial interests of property developers are affected by the exercise of public power, they argue that the same may be said of any number of persons in the community. There is nothing special about property developers. New South Wales submits that the degree of dependence of property developers on decisions of government about matters such as the zoning of land and development approvals distinguishes them from actors in other sectors of the economy. Property developers are sufficiently distinct to warrant specific regulation in light of the nature of their business activities and the nature of the public powers which they might seek to influence in their self-interest, as history in New South Wales shows. These submissions of New South Wales should be accepted. Recent history in New South Wales tells against the plaintiffs' submission. The plaintiffs may be correct to say that there is no other legislation in Australia or overseas which contains a prohibition of the kind found in Div 4A, but a problem has been identified in New South Wales and Div 4A is one means to address it. The Independent Commission Against Corruption ("ICAC") and other bodies have published eight adverse reports since 1990 concerning land development applications. Given the difficulties associated with uncovering and prosecuting corruption of this kind, the production of eight adverse reports in this time brings to light the reality of the risk of corruption and the loss of public confidence which accompanies the exposure of acts of corruption. In ICAC's Report on Investigation into North Coast Land Development [72]

"A lot of money can depend on the success or failure of a lobbyist's representations to Government. Grant or refusal of a rezoning application, acceptance or rejection of a tender, even delay in processing an application that must eventually succeed, can make or break a developer. And decisions on the really mammoth projects can create fortunes for those who succeed. The temptation to offer inducements must be considerable."

True it is that the eight reports relate to applications processed at a local level and that local councils consider most development applications. However, decisions as to land development are also made by relevant State departments, and Ministers are often consulted in the approval process. Pursuant to the EPA Act [73] [74] [75] [76] The purpose of Div 4A is to reduce the risk of undue or corrupt influence in an area relating to planning decisions, where such risk may be greater than in other areas of official decision-making. This purpose furthers the general purpose of Pt 6 of the EFED Act and is "legitimate" within the meaning given to that term in Lange, as are the means adopted to achieve it.

No rational connection to purpose?

The plaintiffs submit that Div 2A and Div 4A have no rational connection to the purpose of targeting corruption. In the language of proportionality analysis, discussed later in these reasons, that is a submission that the impugned provisions are not "suitable". By analogy with the reasons of the joint judgment in Unions NSW, the plaintiffs submit that it is not explained why Div 4A targets only corporations and their close associates who are property developers and not individuals or firms. Other deficiencies are pointed to in Div 2A such as a failure to distinguish between corrupt political donations and those made without a corrupting purpose, and a failure to capture personal gifts. These factors bear no similarity to the problem associated with the provisions at issue in Unions NSW. In that case, s 96D(1) prohibited the acceptance of a political donation unless it was from a person enrolled as an elector. Section 95G(6) effectively aggregated the amount spent by way of electoral communication expenditure by a political party and its affiliated organisations for the purposes of the capping provisions in Div 2A. Unlike other provisions in Pt 6, it was not possible to discern how these provisions could further the general anti-corruption purpose of the EFED Act. The provisions of Div 2A and Div 4A do not suffer from such a problem. New South Wales submits that it may be expected that most commercial land developments will be undertaken by corporations, but it does not matter whether that was the reason for excluding other entities and persons from the operation of Div 4A. If there is a deficiency of the kind contended for by the plaintiffs, it is not one which severs the connection to the anti-corruption purpose of the EFED Act. The same may be said of the other alleged deficiencies in Div 2A.

An equally practicable alternative? – necessity

In Lange [77] ACTV was held to be invalid because there were other, less drastic, means by which the objects of the law could have been achieved. In Unions NSW [78] Lange test may involve consideration of whether there are alternative, reasonably practicable means of achieving the same purpose which have a less restrictive effect on the freedom. If there are other equally appropriate means, it cannot be said that the selection of the one which is more restrictive of the freedom is necessary to achieve the legislative purpose. This method of testing mirrors, to an extent, that which has been applied with respect to legislation which restricts the freedom guaranteed by s 92 of the Constitution. In Monis v The Queen [79] it was said that any alternative means must be "obvious and compelling", a qualification which, as French CJ pointed out in Tajjour v New South Wales [80] The plaintiffs put forward two alternatives to the measures in Div 2A. They say that it would be less restrictive of the freedom if the prohibition on receiving political donations in excess of the applicable caps were confined to those donations which are intended as corrupting; which is to say to limit it to occasions of bribery. They also say that the best method of targeting corruption is transparency and that the requirements in the EFED Act for disclosure of donations could be strengthened. Division 2 of Pt 6 of the EFED Act contains provisions requiring the disclosure to the Electoral Commission [81] [82] [83] The plaintiffs do not explain how these provisions might be strengthened in a way which would render the capping provisions unnecessary. Whilst provisions requiring disclosure of donations are no doubt important, they could not be said to be as effective as capping donations in achieving the anti-corruption purpose of the EFED Act. Limiting restrictions on political donations to acts of bribery would undoubtedly reduce the efficacy of the statutory scheme. The difficulties inherent in detecting and proving bribery in the context of political donations do not suggest that it can be considered a reasonable alternative to capping. Further, it is not the subjective intention of the donor so much as the objective tendency of large payments of money to corrupt both government and the electoral system which is the justification for the restriction. In the course of argument there was some discussion about whether, given the provision made for capping in Div 2A, the outright prohibition of some donors in Div 4A could be said to be necessary. However, the matter is complicated by the fact that capping and the associated public funding for election campaign purposes are not extended to local government elections, whereas the prohibition in Div 4A is. It was not suggested that the legislature should allocate resources to extend the capping and public funding provisions in order to give them the same scope as the prohibition, nor was it suggested that a partial removal of the prohibition, for local government elections, would be practicable. The plaintiffs did not pursue such a line of argument, eschewing capping altogether for being unnecessary.

Other submissions as to proportionality

The plaintiffs submit that Div 2A, and s 95B in particular, does not go far enough and does not achieve its object comprehensively because it does not capture all dealings between a donor and donee. Whether or not this identifies a shortcoming of the provisions, the submission does not identify a want of proportionality. Turning to the object of Div 2A, the plaintiffs say that it goes further than is necessary to target actual corruption and pursues a "wider cosmetic objective" of targeting a "perceived lack of integrity". It is difficult to accept that the public perception of possible corruption in New South Wales is a "cosmetic" concern. Even First Amendment jurisprudence accepts that the "appearance" of corruption in politics is a legitimate target of legislative action [84]

Justification: compatibility and proportionality testing

The plaintiffs' submissions as to proportionality proceed on a correct basis, that proportionality analysis of some kind is part of the Lange test. However, those submissions, and others which have been put to the Court, tend to treat the question of proportionality as one at large and involving matters of impression, such as whether the legislative measures go too far, or not far enough. Something more should be said about the reason why it is necessary to enquire into the proportionality of a legislative measure which restricts the freedom. This requires examination of the nature of the proportionality enquiries which Lange renders necessary, their limits and their relationship with the Lange test of compatibility. The process of justification called for by Lange commences with the requirement that the purpose of the provisions in question, which is to be identified by a process of construction, must be compatible with the system of representative government for which the Constitution provides. Other legal systems which employ proportionality testing to determine the limits of legislative power to restrict a right or freedom also require, before that testing commences, that there be a legitimate purpose, because only a legitimate purpose can justify a restriction [85] Lange requires more, both as to what qualifies as legitimate, and as to what must meet this qualification. It requires, at the outset, that consideration be given to the purpose of the legislative provisions and the means adopted to achieve that purpose in order to determine whether the provisions are directed to, or operate to, impinge upon the functionality of the system of representative government. If this is so, no further enquiry is necessary. The result will be constitutional invalidity. Otherwise, if this first test, of compatibility, is met, attention is then directed to the effect of the provisions on the freedom itself. It is at this point that proportionality testing is applied. The reason it is required is that any restriction of the freedom must be justified, given that the freedom is protective of the constitutionally mandated system of representative government. It is not sufficient for validity that the legislative provisions in question are compatible with the system of representative government, for if the protective effect of the freedom is impaired the system will likely suffer. Therefore, it is also necessary that any burden on the freedom also be justified, and the answer to whether this is so is found by proportionality testing. The difference between the test of compatibility and proportionality testing is that the latter is a tool of analysis for ascertaining the rationality and reasonableness of the legislative restriction, while the former is a rule derived from the Constitution itself.

Proportionality testing in relation to the freedom

A legislative measure will not be invalid for the reason only that it burdens the freedom. It has been pointed out on many occasions that the freedom is not absolute [86] Nationwide News Pty Ltd v Wills [87] ACTV [88] that what is called for is a justification for a burden on the freedom. Similar statements were made in cases which followed, both before [89] [90] Lange. Until Lange, questions remained about how a legislative restriction of the freedom, and that restriction's means, could be said to be justified. Since Lange, the focus has been upon what is involved in the conditions the Lange test states for validity. In the present case, the Commonwealth submitted that the second question in the Lange test is directed to the "sufficiency of the justification", but did not say how such a conclusion is reached, or is not reached. It is true that in some judgments in ACTV [91] [92] Lange, in addition to noting the other requirements arising from the Constitution, pointed clearly in the direction of proportionality analysis. Lange is a judgment of the whole Court. Its terms may be expected to reflect some compromise reached. It is not to be expected that, in its reference to a legislative measure being "reasonably appropriate and adapted" to achieve a legitimate end, which the Court equated with "proportionality" [93] Lange did identify as relevant in ACTV the availability of alternative measures, as mentioned earlier in these reasons. It identified as relevant the relationship between the legitimate end and the means by which this is achieved [94] [95] Much has been written since Lange and Coleman v Power on the topic of proportionality analysis, including, perhaps most influentially, by Professor Aharon Barak. In the period since those decisions the use of proportionality in other jurisdictions, to test the justification of a restriction on a constitutional right or freedom, has gained greater acceptance. Nevertheless, it is not to be expected that each jurisdiction will approach and apply proportionality in the same way, but rather by reference to its constitutional setting and its historical and institutional background. This reinforces the characterisation of proportionality as an analytical tool rather than as a doctrine. It also explains why no decision of this Court has imported into Australian jurisprudence the scrutiny of compelling government interests applied in United States constitutional jurisprudence. More importantly, since Lange and Coleman v Power, considerable attention has been given in judgments in this Court to what the test in Lange requires. A majority of the Court in Unions NSW identified as relevant to, if not inhering in, the test, the first two tests of proportionality. The submissions in this case now direct attention to the relevance of purpose in connection with the extent to which the freedom is burdened. The freedom which is implied from provisions of the Australian Constitution is not a right, of the kind to which proportionality testing is applied by courts in other constitutional systems. Nevertheless, such testing has evident utility as a tool for determining the reasonableness of legislation which restricts the freedom and for resolving conflicts between the freedom and the attainment of legislative purpose. Proportionality provides a uniform analytical framework for evaluating legislation which effects a restriction on a right or freedom. It is not suggested that it is the only criterion by which legislation that restricts a freedom can be tested. It has the advantage of transparency. Its structured nature assists members of the legislature, those advising the legislature, and those drafting legislative materials, to understand how the sufficiency of the justification for a legislative restriction on a freedom will be tested. Professor Barak suggests that "members of the legislative branch want to know, should know, and are entitled to know, the limits of their legislative powers." [96] So far as concerns the courts, the question whether a legislative measure which restricts the freedom can be said to be justified is not to be approached as a matter of impression. It should not be pronounced as a conclusion, absent reasoning. It is not to be inferred that, in stating the test in Lange, it was intended that the test was to be answered by reference to a value judgment as to what is reasonable, made without reference to any generally applicable criteria. To the contrary, as earlier explained, Lange identifies the structure for and, to an extent, the content of proportionality testing. Accepting that value judgments cannot be avoided altogether, their subjectivity is lessened and a more objective analysis encouraged by this process. In so far as proportionality may be considered to involve a conclusion that a statutory limitation is or is not reasonably necessary, the means of testing for this conclusion have already been identified in the test of reasonable necessity, as Unions NSW confirms. It cannot then be said that another, more open ended, enquiry is also required. Something more, and different, must be required. In an article by a former member of the Federal Constitutional Court of Germany [97] Pham v Secretary of State for the Home Department (Open Society Justice Initiative intervening) [98] it was said that proportionality testing may be seen:

"as a tool directing attention to different aspects of what is implied in any rational assessment of the reasonableness of a restriction. ... [It] is designed to ... help control intuitive assessments, [and] make value judgments explicit. Whether it is also used as a tool to intensify judicial control of state acts is not determined by the structure of the test but by the degree of judicial restraint practised".

In a system operating according to a separation of powers, judicial restraint should be understood to require no more than that the courts undertake their role without intruding into that of the legislature.

In Bank Mellat v HM Treasury (No 2) [99] It is generally accepted that there are at least three stages to a test of proportionality [100] Suitability is also referred to as "appropriateness" or "fit" [101] Unions NSW [102] The second stage of the test – necessity – generally accords with the enquiry identified in Unions NSW [103] It is important to recognise that the question of necessity does not deny that it is the role of the legislature to select the means by which a legitimate statutory purpose may be achieved. It is the role of the Court to ensure that the freedom is not burdened when it need not be. Once within the domain of selections which fulfil the legislative purpose with the least harm to the freedom, the decision to select the preferred means is the legislature's [104] The first two stages of the test for the proportionality, or reasonableness, of a legislative measure concern the relationship between the legitimate legislative purpose ("ends") and the means employed to achieve it ("means"). Neither the importance of the legislative purpose nor the extent of the effect on the freedom are examined at these stages. The Lange test identifies the extent of the effect on the freedom as relevant [105] Lange test does not expressly identify assessment of the importance of the legislative purpose as a relevant factor. It is not possible to ignore the importance of a legislative purpose in considering the reasonableness of a legislative measure because that purpose may be the most important factor in justifying the effect that the measure has on the freedom. The submissions for the Commonwealth bear this out. The Commonwealth submitted that the Court cannot consider the relationship between the means adopted by the law and "the constitutional imperative" to not infringe the freedom without having the object of the law in view, for some statutory objects may justify very large incursions on the freedom. The example the Commonwealth gave was the object of protecting security of the nation at a time of war. If, by "the constitutional imperative", it is meant the maintenance of the system of representative government, the submission may blur the distinction between the first Lange requirement, of compatibility with that system, and the second test, for proportionality of the effects on the freedom. Nevertheless, this submission correctly directs attention to the legislative purpose as a key element of a justification. The last stage of the Lange test did not mandate an enquiry limited to the extent of the burden on the freedom. The question whether a statutory effect on the freedom is "undue" or "impermissibly burdens" the freedom must, logically, bring into consideration the statutory purpose. To leave it out of consideration is to deny the most important aspect of justification from the perspective of the legislature. The cases before and after Lange speak in terms of legislative justification as earlier mentioned [106] Lange test. The purpose of and benefit sought to be achieved by legislative provisions assume relevance in the third stage of the test for proportionality. This stage, that of strict proportionality or balancing, is regarded by the courts of some legal systems as most important. It compares the positive effect of realising the law's proper purpose with the negative effect of the limits on constitutional rights or freedoms. It requires an "adequate congruence between the benefits gained by the law's policy and the harm it may cause" [107] [108] [109] Castlemaine Tooheys Ltd v South Australia [110] s 92 freedom. It will be evident from the conclusion to these reasons that the methodology to be applied in this aspect of proportionality does not assume particular significance. Fundamentally, however, it must proceed upon an acceptance of the importance of the freedom and the reason for its existence. This stands in contrast to the basic rule of balancing as applied to human rights, which has been subject to criticism for failing to explain the reasons underlying the creation of the right in order to put the reasons for its protection, or which justify its limitation, in perspective [111] The balance struck between the importance of the purpose and the extent of the restriction on the freedom necessarily involves a value judgment. The fact that a value judgment is involved does not entitle the courts to substitute their own assessment for that of the legislative decision-maker [112] Constitution. However, the courts have a duty to determine the limit of legislative power affecting constitutionally guaranteed freedoms, and assessments by courts of the public interest and benefit in a piece of legislation are commonplace. In ACTV and Nationwide News, and in later cases, the public interest pursued by the legislation in question was identified as relevant to whether a restriction on the freedom was justified [113] To say that the courts are able to discern public benefits in legislation which has been passed is not to intrude upon the legislative function. The courts acknowledge and respect that it is the role of the legislature to determine which policies and social benefits ought to be pursued. This is not a matter of deference. It is a matter of the boundaries between the legislative and judicial functions. Deference to legislative opinion, in the sense of unquestioning adoption of the correctness of these choices, does not arise for courts. It is neither necessary nor appropriate for the purposes of the assessment in question. The process of proportionality analysis does not assess legislative choices except as to the extent to which they affect the freedom. It follows from an acceptance that it is the constitutional duty of courts to limit legislative interference with the freedom to what is constitutionally and rationally justified, that the courts must answer questions as to the extent of those limits for themselves. It should also be said that deference in the sense mentioned is not to be confused with a "margin of appreciation", a term which is sometimes given an extended meaning. In the context of courts of the European Community and now European Union, it is best understood as reflecting an acceptance by those courts of the advantage that courts of member states have with respect to particular matters, for example, moral standards applicable and the necessity for a restriction or penalty to meet them [114] [115] In this case, the third stage of the test presents no difficulty for the validity of the impugned provisions. The provisions do not affect the ability of any person to communicate with another about matters of politics and government nor to seek access to or to influence politicians in ways other than those involving the payment of substantial sums of money. The effect on the freedom is indirect. By reducing the funds available to election campaigns there may be some restriction on communication by political parties and candidates to the public. On the other hand, the public interest in removing the risk and perception of corruption is evident. These are provisions which support and enhance equality of access to government, and the system of representative government which the freedom protects. The restriction on the freedom is more than balanced by the benefits sought to be achieved. The questions stated should be answered as follows: In so far as Div 4A prohibits the making by a property developer of a political donation or acceptance of a political donation from a property developer, it is not invalid. It does not impermissibly burden the implied freedom of communication on governmental and political matters contrary to the Constitution. No. No.

4. The plaintiffs.

GAGELER J.

Introduction

This is the second case in as many years in which provisions of Pt 6 of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) have been challenged in the original jurisdiction of this Court on the ground that they impermissibly burden the implied constitutional freedom of political communication. The challenge in the first case, Unions NSW v New South Wales [116] s 96D and to s 95G(6). Section 96D prohibited political donations by corporations, industrial associations and individuals who were not on the roll of electors. Section 95G(6) aggregated electoral communication expenditure of a political party with that of an affiliated organisation for the purpose of determining whether the political party exceeded the applicable cap on electoral communication expenditure imposed by Div 2B. Both provisions were held to impose impermissible burdens on the implied constitutional freedom. The challenge in this case is to Div 2A (ss 95AA to 95D), s 96E and Div 4A (ss 96GAA to 96GE) in Pt 6 of the Act. Division 2A imposes a general cap on the amounts which all persons are permitted to give as political donations in relation to State elections. Section 96E prohibits the making of certain indirect contributions to election campaigns. Division 4A relevantly prohibits the making of any political donations by corporate property developers and individuals closely associated with corporate property developers. Together with a majority of the Court, I hold that none of the provisions challenged in this case imposes an impermissible burden on the implied constitutional freedom. Unlike a majority of the Court, however, I do not reach that result through the template of standardised proportionality analysis. I reach that result instead by concluding that the restrictions on political communication imposed by the provisions are no greater than are reasonably necessary to be imposed in pursuit of a compelling statutory object. The compelling statutory object is the object of preventing corruption and undue influence in the government of the State. To explain my analysis, it is appropriate to commence by reiterating the structural reasons identified in Lange v Australian Broadcasting Corporation [117]

Explaining why the freedom exists

Brennan CJ explained in McGinty v Western Australia [118]

"Implications are not devised by the judiciary; they exist in the text and structure of the Constitution and are revealed or uncovered by judicial exegesis. No implication can be drawn from the Constitution which is not based on the actual terms of the Constitution, or on its structure."

Brennan CJ went on to restate the explanation given by Mason CJ in Australian Capital Television Pty Ltd v The Commonwealth ("ACTV")[119] that "where the implication is structural rather than textual ... the term sought to be implied must be logically or practically necessary for the preservation of the integrity of that structure".

Freedom of political communication, as authoritatively expounded in Lange, is an implication drawn from the structure of the Constitution. In Lange, as in its earliest expositions in ACTV and in Nationwide News Pty Ltd v Wills [120] Constitution, and for the preservation of the integrity of the method of constitutional alteration prescribed by s 128 of the Constitution. Neither the scope nor the content of the freedom can adequately be understood except by reference to the features of that system of representative and responsible government, and that method of constitutional alteration, which give rise to the necessity for its implication. Chapter I of the Constitution establishes and sustains the Parliament of the Commonwealth. Section 1 vests the legislative power of the Commonwealth in the Federal Parliament, which that section provides is to consist of the Senate, the House of Representatives and the Queen. The composition of the Senate is governed by the requirement of s 7 that it "shall be composed of senators for each State, directly chosen by the people of the State". The composition of the House of Representatives is governed by the corresponding requirement of s 24 that it "shall be composed of members directly chosen by the people of the Commonwealth", and by the additional requirement of that section that the number of members "shall be, as nearly as practicable, twice the number of the senators". Section 13, and ss 28 and 32, respectively require the holding of an election for half of the Senate, and the holding of a general election for the House of Representatives, at least once every three years. Sections 8 and 30 combine: to equate the qualifications of electors of senators with the qualifications of electors of members of the House of Representatives; to equate the qualifications of electors of members of the House of Representatives with the qualifications of electors of the more numerous House of Parliament of each State until otherwise provided by the Parliament under s 51(xxxvi); and to mandate that, in the choosing of senators and members, "each elector shall vote only once". The Parliament is required, by ss 5 and 6 respectively, to be summoned to meet not later than 30 days after the day appointed for the return of the writs for a general election and to hold a session at least once every year. Questions in the Senate and in the House of Representatives are required, through the operation of ss 23 and 40 respectively, to be determined by a majority of votes, with no senator or member having more than one vote. Section 53 makes clear that the Senate has "equal power with the House of Representatives in respect of all proposed laws", with the exceptions that proposed laws appropriating revenue or moneys, or imposing taxation, cannot originate in the Senate, and that the power of the Senate to amend such laws is limited. Disagreements between the Senate and the House of Representatives about any proposed law are capable of resolution under s 57: by simultaneous dissolution of the Senate and the House of Representatives (resulting, under ss 12 and 32, in the issuing of writs for elections to both); and, if disagreement persists after such a dissolution, by holding a joint sitting of the Senate and the House of Representatives, in which the proposed law is taken to be duly passed if affirmed by an absolute majority of the total number of senators and members. Chapter II of the Constitution establishes and sustains the Executive Government of the Commonwealth. Section 61 vests the executive power of the Commonwealth in the Queen, and makes that executive power "exercisable by the Governor-General as the Queen's representative". Section 64 empowers the Governor-General to appoint officers to administer departments of State for the Commonwealth, who are to be Ministers of State for the Commonwealth. Tying the structure of the Executive Government to the structure of the Parliament, s 64 adds the centrally important qualification that "no Minister of State shall hold office for a longer period than three months unless he is or becomes a senator or a member of the House of Representatives". The link made in that qualification in s 64 – between the structure of the Parliament established and sustained by Ch I and the structure of the Executive Government established and sustained by Ch II – makes plain the design of those chapters to facilitate the application of the particular system of representative government, known as "responsible government", to the "indissoluble Federal Commonwealth" established by the Constitution. That system had developed in the second half of the nineteenth century in each of the six colonies which, on federation, became the Australian States. Evatt J was not inaccurate in stating that "prior to the establishment of the Commonwealth of Australia in 1901, responsible government had become one of the central characteristics of our polity" [121] Constitution is for the advancement of representative government" [122] Constitution are superimposed" [123] The theory and practical operation of responsible government, as it had come to be understood in the Australian colonies by the end of the nineteenth century, were encapsulated in the explanation given by Sir Samuel Griffith in notes he prepared on the 1891 draft of the Constitution. Sir Samuel wrote [124]

"The system called Responsible Government is based on the notion that the head of the State can himself do no wrong, that he does not do any act of State of his own motion, but follows the advice of his ministers, on whom the responsibility for acts done, in order to give effect to their volition, naturally falls. They are therefore called Responsible Ministers. If they do wrong, they can be punished or dismissed from office without effecting any change in the Headship of the State. Revolution is therefore no longer a necessary possibility; for a change of Ministers effects peacefully the desired result. The system is in practice so intimately connected with Parliamentary Government and Party Government that the terms are often used as convertible. The present form of development of Responsible Government is that, when the branch of the Legislature which more immediately represents the people disapproves of the actions of Ministers, or ceases to have confidence in them, the head of the State dismisses them, or accepts their resignation, and appoints new ones. The effect is that the actual government of the State is conducted by officers who enjoy the confidence of the people."

Brennan J drew on that explanation in Nationwide News [125] Lange to make the pivotal point that the confidence of the Australian people which the legislative and executive branches of the government of the Commonwealth are to enjoy "is ultimately expressed or denied by the operation of the electoral process" [126] Within the structure of representative and responsible government established by Chs I and II of the Constitution, "the Australian people" are more precisely identified as the electors, who are to vote at least once every three years, in an election for at least one half of the Senate and in a general election for the House of Representatives [127] s 128 of the Constitution, the method of constitutional alteration for which that section provides is an extension of the legislative process established by Ch I of the Constitution, which relies directly on the participation of the same electors. They are to vote on a proposed law for the alteration of the Constitution within six months of the passage of the proposed law by an absolute majority of each of the House of Representatives and the Senate. The proposed law is then to be presented to the Governor-General for assent only if approved by a majority of all electors as well as a majority of electors in each State. Professor Harrison Moore, writing in 1902, identified "the prevalence of the democratic principle" as the "predominant feature" of the Constitution [128] [129] That "great underlying principle" was prominent in the reasoning of Mason CJ in ACTV [130] Constitution is dependent on the choice made by electors. Electoral choice is the means of constituting the Parliament of the Commonwealth, and of indirectly constituting the Executive Government of the Commonwealth. Electoral choice thereby constitutes the principal constraint on the constitutional exercise by the Parliament of the legislative power of the Commonwealth, and on the lawful exercise by Ministers and officers within their departments of the executive power of the Commonwealth. The concept of electoral choice acting as a constraint on the exercise of Commonwealth legislative and executive power accords with the classic explanation given in the joint reasons for judgment in the Engineers' Case [131] Constitution is a matter to be guarded against by the constituencies and not by the Courts". The explanation continued [132]

"When the people of Australia, to use the words of the Constitution itself, 'united in a Federal Commonwealth,' they took power to control by ordinary constitutional means any attempt on the part of the national Parliament to misuse its powers. If it be conceivable that the representatives of the people of Australia as a whole would ever proceed to use their national powers to injure the people of Australia considered sectionally, it is certainly within the power of the people themselves to resent and reverse what may be done. No protection of this Court in such a case is necessary or proper."

The constitutional freedom of political communication does not contradict that Engineers' Case orthodoxy. The implication of the constitutional freedom is founded on an acceptance that electoral choice constitutes the "ordinary constitutional means" of constraining "the extravagant use of the granted powers in the actual working of the Constitution". The necessity for the implication of the constitutional freedom as a limitation on legislative and executive power arises from a paradox inherent in the nature of the majoritarian principle which governs that electoral choice. The paradox is that communication of information relevant to the making of an informed electoral choice is peculiarly susceptible to being restricted or distorted through the exercise of legislative or executive power precisely because the exercise of legislative or executive power is subject to the ultimately controlling influence of electoral choice. The ever-present risk within the system of representative and responsible government established by Chs I and II of the Constitution is that communication of information which is either unfavourable or uninteresting to those currently in a position to exercise legislative or executive power will, through design or oversight, be impeded by legislative or executive action to an extent which impairs the making of an informed electoral choice and therefore undermines the constitutive and constraining effect of electoral choice. The risk, in other words, is of legislative or executive impairment of "the capacity of, or opportunity for, the Australian people to form the political judgments required for the exercise of their constitutional functions" [133] The judicial power, insulated from the electoral process by the structural requirements of Ch III of the Constitution, is uniquely placed to protect against that systemic risk. Here, as elsewhere within our constitutional tradition, "the absolute independence of the judiciary is the bulwark of the constitution against encroachment whether by the legislature or by the executive" [134] Mason CJ emphasised the reality of the ever-present risk to the system of representative and responsible government of legislative or executive restriction of information relevant to the making of an informed electoral choice when he said in ACTV [135]

"Experience has demonstrated on so many occasions in the past that, although freedom of communication may have some detrimental consequences for society, the manifest benefits it brings to an open society generally outweigh the detriments. All too often attempts to restrict the freedom in the name of some imagined necessity have tended to stifle public discussion and criticism of government."

The risk has been demonstrated by experience to be greatest in respect of legislation which has as its subject-matter the restriction of political association[136] or the restriction of communication within a category of communication which has an inherently political content[137]. Referring to a subset of that latter category, Mason CJ suggested in ACTV[138] that it is in the area of "restrictions affecting free communication in the conduct of elections for political office" that the implied freedom "fulfils its primary purpose". That suggestion has been borne out by the outcomes in ACTV and in Unions NSW.

The necessity which gives rise to the implication of the constitutional freedom of political communication also defines its scope and content. That was the point made in Lange when, after it was said that "ss 7 and 24 and the related sections of the Constitution necessarily protect that freedom of communication between the people concerning political or government matters which enables the people to exercise a free and informed choice as electors", it was added that "to the extent that the freedom rests upon implication, that implication defines the nature and extent of the freedom" [139] The freedom implied as a matter of necessity does not go beyond freedom of political communication. The freedom exists to protect: systemic integrity, not personal liberty; communication, not expression; and political communication, not communication in general. The protection "creates an area of immunity from legal control" as a consequence of its operation and not as a reason for its existence [140] That limitation in its scope immediately distinguishes the implied freedom of political communication from express guarantees of freedom of speech or expression in many other constitutional systems. Securing the "flow of information" necessary for people to "build and assert political power" has long been recognised as an important purpose of the free speech clause of the First Amendment to the Constitution of the United States [141] [142] [143] [144] [145] The content of the implied constitutional freedom is defined by the need to preserve the integrity of both the system of representative and responsible government established by Chs I and II of the Constitution and the method of constitutional alteration prescribed by s 128 of the Constitution. The freedom implied, as it was put in Lange, "is not absolute", but "is limited to what is necessary for the effective operation of that system of representative and responsible government provided for by the Constitution" [146] The freedom constitutionally afforded to political communication is not the laissez-faire of an unregulated marketplace of ideas [147] [148] [149] That vital, and necessarily limited, role for the judiciary in the preservation of the implied freedom of political communication was highlighted by Brennan J in Nationwide News [150] when he said that "[t]he balancing of the protection of other interests against the freedom to discuss governments and political matters is, under our Constitution, a matter for the Parliament to determine and for the Courts to supervise". The two-step analytical framework formulated in Lange for determining whether or not a law impermissibly burdens political communication guides the performance of that supervisory role. The two steps are "together a functional reflection of the nature of the protected freedom" [151]

Determining whether the freedom is infringed

The two steps in the Lange analysis are together directed to the determination of whether a law impermissibly burdens the implied constitutional freedom of political communication. The systemic risk of impairment of electoral choice by State or Territory legislative or executive action being not materially different from the systemic risk of impairment of electoral choice by Commonwealth legislative or executive action, the Lange analysis applies equally to a State law or Territory law as to a Commonwealth law. The first step in the Lange analysis is to inquire whether, and if so how, the law effectively burdens political communication in its legal or practical operation. "The expression 'effectively burden'", as Hayne J pointed out in Monis v The Queen [152] and Keane J reiterated in Unions NSW [153] The simplicity of the inquiry should not detract from its importance. The oral argument in this case seemed at times to proceed on the assumption that the first step is perfunctory – no more than a box to be ticked before moving to the second step. If that were the case, the Lange analysis would be detached from the function that it was formulated to perform. The first step is critical. If a law does not operate to impose a meaningful restriction on political communication, the supervisory role of the courts is not engaged. If the law does operate to impose a meaningful restriction on political communication, the supervisory role of the courts is engaged to consider the justification for that restriction. The whole point of the second step in the Lange analysis is to determine whether the restriction on political communication identified at the first step is consistent with the preservation of the integrity of the system of representative and responsible government established by Chs I and II of the Constitution, and of the method of constitutional alteration prescribed by s 128 of the Constitution. The second step, as refined and restated by a majority in Coleman v Power [154] Constitution. To conclude that the law is so reasonably appropriate and adapted "requires finding that the object of the law is of importance and the method of achieving that object is reasonable when regard is had to the demands of representative government" [155] The first stage is concerned to identify the end – the object or purpose – of the law. To be legitimate, a legislative end must itself be compatible with the system of representative and responsible government established by the Constitution. The first stage requires that the imposition of the restriction on political communication is explained by the law's pursuit of an end which is consistent with preservation of the integrity of the system of representative and responsible government. Explanation precedes justification. The second stage is concerned to examine whether the law imposing the restriction on political communication pursues that end in a manner which is consistent with preservation of the integrity of the system of representative and responsible government. The second stage requires that the restriction on political communication that is imposed by the law be justified by the law's reasonable pursuit of the identified legitimate end. The object or purpose of a law is what the law is designed to achieve in fact. Identification of what the law is designed to achieve in fact is akin to identification of the "mischief" which the law is designed to address [156] In Unions NSW, French CJ, Hayne, Crennan, Kiefel and Bell JJ considered such a rational connection to be wanting. Their Honours found ss 96D and 95G(6) of the Act to impose a practical restriction on political communication, and found that the practical restriction was sufficiently identified for the purposes of the analysis in that case as the removal of a source of donor funding which would otherwise have been available to political parties and candidates to meet the costs of engaging in political communication, as regarded s 96D [157] [158] [159] explained by the law's pursuit of that end, let alone justified by the law's pursuit of that end [160] Keane J took a different route to conclude that ss 96D and 95G(6) of the Act failed the Lange analysis. His Honour held that the restrictions on political communication imposed by those provisions did not pursue the identified end in a manner consistent with preservation of the integrity of the system of representative and responsible government established by Chs I and II of the Constitution because the restrictions unjustifiably disfavoured some sources of political information and favoured others [161] ACTV. ACTV was said in Lange to be a case in which the majority holding was "that a law seriously impeding discussion during the course of a federal election was invalid because there were other less drastic means by which the objectives of the law could be achieved" [162] There is, however, another, more specific, explanation for the holding of the majority in ACTV. As Keane J pointed out in Unions NSW, the legislation in ACTV "was held to be invalid on the basis of the discriminatory character of its proscription of some sources of political communication relating to electoral campaigning" [163] The discriminatory character of the legislative proscription considered in ACTV was brought out most strongly in the reasons for judgment of Mason CJ. Mason CJ was prepared to assume that the legislation in question, which restricted political advertising on television and radio during an election campaign to allocated and publicly funded time slots, had as its legitimate end the safeguarding of "the integrity of the political process by reducing pressure on parties and candidates to raise substantial sums of money, thus lessening the risk of corruption and undue influence" [164] [165] [166] The words "reasonably appropriate and adapted" were explained in Lange to have been adopted in the formulation of the second step in the Lange analysis to ensure uniformity. It was recorded that some members of the Court had favoured different expressions in earlier cases, and that no member of the Court then thought it necessary to distinguish between them. Other expressions of the formulation were noted to have included "proportionality" [167] Gleeson CJ demonstrated in Mulholland v Australian Electoral Commission [168] [169] [170] [171] This case does not require a choice to be made between the alternative expressions of the "reasonably appropriate and adapted" formulation. Much less does this case warrant consideration of the benefits and detriments of the wholesale importation into our constitutional jurisprudence, under the rubric of proportionality, of a particular and prescriptive form of proportionality analysis drawn from that which has come to be applied in relation to the Canadian Charter of Rights and Freedoms and the European Convention on Human Rights. The content and consequences of the approach now propounded by a majority of this Court must await consideration in future cases. Issues which have the potential to arise in relation to such an approach were anticipated more than a decade ago in the published scholarship of Professor Adrienne Stone [172] First, I am not convinced that one size fits all. In particular, I am not convinced that standardised criteria, expressed in unqualified terms of "suitability" and "necessity", are appropriate to be applied to every law which imposes a legal or practical restriction on political communication irrespective of the subject-matter of the law and no matter how large or small, focussed or incidental, that restriction on political communication might be. I think it important in that respect to bear in mind the significance to proportionality analysis, as actually undertaken in other jurisdictions, of the varying degrees of latitude that are in practice afforded to governmental action. Those degrees of latitude are rarely captured in generic descriptions of "tests" of proportionality. Often they are not articulated but are embedded within the institutional arrangements and practices within which those tests are applied. Within a national jurisdiction, the degree of latitude afforded by the judiciary to the legislature or executive has sometimes been referred to as the "zone of proportionality". Between national jurisdictions, the degree of latitude afforded to nation states is commonly referred to as the "margin of appreciation" [173] Two examples of judicial recognition of those varying degrees of latitude are sufficient. Both relate to the European Convention on Human Rights. The first example concerns the Supreme Court of the United Kingdom. The Supreme Court has of late adopted a four-part proportionality test as a "heuristic tool" for determining whether or not a legislative or executive measure infringes a Convention right [174] [175] [176] [177] [178] [179]

"The central question as regards such measures is not ... whether less restrictive rules should have been adopted or, indeed, whether the state could prove that, without the prohibition, the legitimate aim would not be achieved. Rather the core issue is whether, in adopting the general measure and striking the balance it did, the legislature acted within the margin of appreciation afforded to it."

Second, I am not convinced that to require a law which burdens political communication to be "adequate in its balance" is to adopt a criterion of validity which is sufficiently focussed adequately to reflect the reasons for the implication of the constitutional freedom and adequately to capture considerations relevant to the making of a judicial determination as to whether or not the implied freedom has been infringed. I think it important in that respect to bear in mind that the equation of "strict proportionality" with "specific (or ad hoc) balancing" has always been controversial. Indeed, it has been the subject of reservation even by its most prominent proponent. In his influential treatise tracing the Germanic origins and global expansion of structured proportionality analysis, published in 2012, Professor Aharon Barak described the transition involved from the expression of the "basic rule" of balancing to the concrete application of that basic rule through specific (or ad hoc) balancing on a case-by-case basis as "particularly sharp" and "not desirable" [180] [181]

"The basic rule of balancing is too abstract. It does not specifically relate to many of the aspects in which the particular right in question becomes a special object of either limitation or protection. It does not contain the required focus on the reasons underlying the creation of those rights, and thus does not directly relate to the reasons that justify their limitation or protection. It also does not include a proper roadmap of all the considerations that would justify the protection of a constitutional right. In contrast, the specific rule of balancing is at too low a level of abstraction. It only relates to the case at hand, and lacks a more general viewpoint of the system as a whole."

Professor Barak went on to advocate the development of what he termed an "intermediate-level rule" of "principled balancing" in accordance with which the "basic rule" would be implemented through the adoption of a number of "principled rules or principled formulas" [182] [183] Were such element of balancing as might be incorporated into the Lange analysis to be formulated in terms of "principled balancing", along the lines Professor Barak has advocated, it would go some way to alleviating the concern which underlies the second of the reservations I have recorded. The adoption of principled balancing only at a final stage of a standardised proportionality analysis would, however, bring the first of the reservations I have expressed into even sharper relief. It would do so by highlighting the question of why a refinement of that nature should be limited to that final stage of analysis. Why shouldn't the principled consideration which underlies a constitutional right or freedom, and the justification of its limitation, permeate the entirety of the analysis? In the context of the judicial consideration of an express constitutional right which is conferred subject to an express constitutional limitation, it might well be possible to dismiss such a question as entirely rhetorical. The text enshrining the right requires that a judgment be made and, by one means or another, that judgment must be made. In the context of a constitutional freedom which arises only by implication, the question demands an answer. The judgment to be made can never be divorced from the reasons why there is a judgment to be made. In my view, it is imperative that the entirety of the Lange analysis is undertaken in a manner which cleaves to the reasons for the implication of the constitutional freedom which it is the sole function of the Lange analysis to protect. Whatever other analytical tools might usefully be employed, fidelity to the reasons for the implication is in my view best achieved by ensuring that the standard of justification, and the concomitant level or intensity of judicial scrutiny, not only is articulated at the outset but is calibrated to the degree of risk to the system of representative and responsible government established by the Constitution that arises from the nature and extent of the restriction on political communication that is identified at the first step in the analysis. No refinement of the formulation of the second step in the Lange analysis could ever be expected to remove the element of judgment required in the exercise of supervisory jurisdiction by a court. Nor should it ever be expected to remove the need for reasoned elaboration of that judgment in a particular case. Judicial identification of the standard of justification, or level of scrutiny, actually applied in a particular case or category of cases nevertheless forms an essential part of that reasoned elaboration. It contributes to consistency and predictability in the application of the implied freedom. No unitary standard of justification can or should be applied across all categories of cases. To date that has repeatedly been recognised when it has been accepted that a law which operates to impose a content-based restriction will demand closer scrutiny than a restriction based on the form or manner of communication [184] [185] Gleeson CJ went on in Mulholland to identify the standard of justification applicable to a restriction on political communication in the conduct of elections for political office. The standard he identified was that stated by Mason CJ in ACTV [186] Levy v Victoria [187] [188] [189] Here, the context for the application of the Lange analysis is relevantly the same: the conduct of elections for political office. Constitutional principle and judicial consistency combine to require that the standard applied at the second step in the analysis remains that stated by Mason CJ in ACTV and adopted by Gleeson CJ in Mulholland. What is required to sustain the validity of Div 2A, s 96E and Div 4A in the application of the second step in the Lange analysis is therefore appropriately stated as being: that such restriction as each imposes on political communication is imposed in pursuit of an end which is appropriately characterised within our system of representative and responsible government as compelling; and that the imposition of the restriction in pursuit of that compelling end can be seen on close scrutiny to be a reasonable necessity. In the application of that standard, much turns on identification of the precise nature and degree of the restriction which each of the impugned provisions imposes on political communication. Much also turns on the identification and characterisation of the end each is designed to achieve. It is convenient to address those topics globally in relation to Div 2A, s 96E and Div 4A before going to address the necessity for the particular restrictions imposed by each of Div 2A and Div 4A. The necessity for s 96E can then be dealt with shortly and distinctly.

The nature and degree of the restrictions on political communication

Conformably with the finding in Unions NSW in relation to s 96D and s 95G(6), it is common ground between the parties that Div 2A, s 96E and Div 4A operate to restrict political communication by restricting the funds available to candidates and political parties to meet the costs of political communication. The nature and degree of that practical restriction differs for each of Div 2A and Div 4A. It is as well to mention that difference now. The cap on political donations imposed by Div 2A applies in relation to State elections, not in relation to local government elections. The Division's relevant legal operation is to prohibit a candidate or political party accepting a political donation from a person in excess of the applicable cap, being $2,000 per person per financial year for political donations to candidates or $5,000 per person per financial year for political donations to registered political parties [190] [191] [192] Unions NSW [193] The prohibition on political donations imposed by Div 4A applies equally in relation to local government elections, in respect of which no public funding is available, and where there are no caps on the permitted electoral communication expenditure imposed on candidates and political parties. The relevant legal operation of Div 4A is to make it unlawful for a corporate property developer, or a close associate of a corporate property developer, to make any political donation to a candidate or political party [194] For completeness, it can be noted that the relevant practical effect of the prohibition on indirect campaign contributions in s 96E is complementary to Div 2A and Div 4A. Its legal operation is to prohibit any person from conferring on candidates and political parties specified kinds of benefits which might be of assistance in the conduct of an election campaign. Its practical operation is thereby to limit the assistance capable of being received by candidates and political parties engaged in State and local government elections to political donations regulated, relevantly, by Div 2A and Div 4A. The plaintiffs eschew any argument that the payment of money (or the conferral of other benefits) could itself be political communication. They are right to do so. Whether or not it might in another context be capable of being characterised as a form of expression, mere payment of money can hardly be regarded as a form of communication. The mere fact of making a political donation communicates nothing. As New South Wales rightly points out, making a political donation does not even necessarily communicate support for the recipient's policies. It is not unheard of for donors to donate to more than one party. The plaintiffs do, however, argue that the impugned provisions restrict political communication in another way. Indeed, they place that other restriction on political communication at the forefront of their argument that the provisions impermissibly burden the implied constitutional freedom. What the plaintiffs say is that, by restricting political donations (the payment of money or the provision of other benefits), the provisions restrict political communication by removing a means of facilitating donors making political representations to candidates and parties. The plaintiffs' principal argument, in effect, is that Div 2A, s 96E and Div 4A restrict political communication by removing the preferential access to candidates and political parties which would otherwise come to those who have the capacity and incentive to make large political donations. The argument is as perceptive as it is brazen. It goes to the heart of the mischief to which the provisions are directed.

The identification and compelling nature of the legislative ends

Section 4A of the Act, inserted by amendment after the decision in Unions NSW [195] [196] [197] What it is necessary to do in order to explain the restrictions imposed on political communication by Div 2A and Div 4A is to unpack the relevant meaning of corruption and undue influence. Corruption is perhaps more readily recognised than defined. One universally recognised form of corruption, however, is for a public official to receive money in a private capacity in circumstances calculated to influence the performance of the official's public duties. The corrosive impact of that form of corruption on the functioning of representative and responsible government was addressed in two decisions of this Court in the 1920s, in terms which resonate with the reasons later held to necessitate the implication of the constitutional freedom of political communication. The issue in Horne v Barber [198] Closer Settlement Act 1915 (Vic) and the Discharged Soldiers Settlement Act 1917 (Vic). The agreement was held to be contrary to public policy because of its tendency to interfere with the proper discharge of the duties of the member. Knox CJ and Gavan Duffy J described the tendency of the agreement to interfere with the proper discharge of the duties of the member as twofold: it "afforded an inducement to [the member] to misuse his position and influence as a member of Parliament for his own pecuniary gain ... and was also calculated to hamper him in forming an unbiased judgment and in expressing a free and honest criticism on the transaction as an act of the Executive Government or its agents" [199] Isaacs J explained that "the whole essence of responsible government, which is the keystone of our political system, and is the main constitutional safeguard the community possesses", lay in the performance of a duty on the part of each member of Parliament of "watching on behalf of the general community the conduct of the Executive" [200] [201]

"The effective discharge of that duty is necessarily left to the member's conscience and the judgment of his electors, but the law will not sanction or support the creation of any position of a member of Parliament where his own personal interest may lead him to act prejudicially to the public interest by weakening (to say the least of it) his sense of obligation of due watchfulness, criticism, and censure of the Administration."

Rich J said[202]:

"Members of Parliament are donees of certain powers and discretions entrusted to them on behalf of the community, and they must be free to exercise these powers and discretions in the interests of the public unfettered by considerations of personal gain or profit. So much is required by the policy of the law."

In R v Boston [203] [204]

"Payment of money to a member of Parliament to induce him to persuade or influence or put pressure on a Minister to carry out a particular transaction tends to the public mischief in many ways, irrespective of whether the pressure is to be exercised by conduct inside or outside Parliament. It operates as an incentive to the recipient to serve the interest of his paymaster regardless of the public interest, and to use his right to sit and vote in Parliament as a means to bring about the result which he is paid to achieve. It impairs his capacity to exercise a disinterested judgment on the merits of the transaction from the point of view of the public interest, and makes him a servant of the person who pays him, instead of a representative of the people."

After restating the views they had each separately expressed in Horne v Barber, Isaacs and Rich JJ together summed up the "fundamental obligation" of a member of Parliament in terms of "the duty to serve and, in serving, to act with fidelity and with a single-mindedness for the welfare of the community"[205]. The reasons for judgment of the remaining member of the majority, Higgins J, were to similar effect[206].

Undue influence has different meanings in different contexts. Influence is a matter of degree; whether or not influence is undue is a matter of judgment; and judgment is a matter of perspective. The perspective here is the effect on the integrity of government. The influence which comes with the preferential access to government resulting from the making of political donations does not necessarily equate to corruption. But the line between a payment which increases access to an elected official and a payment which influences the official conduct of an elected official is not always easy to discern. The difficulty of drawing such a line was highlighted in a report to the Parliament of New South Wales made by the Independent Commission Against Corruption soon after its establishment in 1988 [207] [208]

"Mr Davison argued in favour of the practice of paying for access to Ministers and Members of Parliament. He said that donors to party funds were invited to functions where they had the opportunity of mixing with Ministers and other Parliamentarians at a social level. He said, 'One has better prospects dealing with anybody, if one is able to deal with them on a personal basis'.

Speaking on Dr Munro's behalf, he said, with disarming frankness:-



'One pays money to get in the door. One can't dance at the ball unless one has paid the entry fee.'



Developing the argument further, Mr Davison said that those who paid money for access, were simply putting themselves on the same footing so far as access is concerned, as members of the particular Minister's party or party branch, who had the opportunity of enjoying access to the Minister on a regular basis. The proposition is really that there are some people who enjoy privileged access through mateship, or membership of the party or the 'Old Boys' Club', and that outsiders should have the right to buy their way into the select group, and out of the disadvantage which they would otherwise suffer.



Senior counsel assisting the Commission [Mr Toomey] put the contrary argument. It is that rather than speaking in terms of outsiders paying to enjoy the same advantages as mates, the advantage of privileged access for commercial purposes should not be enjoyed by anyone. It is one thing, and proper, for a party member to be able to discuss political issues at close quarters with Government leaders who are members of his party. It is another thing, and improper, for advantage to be taken of that relationship to push personal or commercial interests.



Mr Toomey was arguing a matter of principle. Mr Davison was asserting a fact of life."

Under the heading "Payment for Favours", Mr Roden then stated and illustrated the reality of the threat to the integrity of government posed by the making of political donations. He said [209]

"Corruption of the system is complete, when it allows the payment of money for political favours, and when decisions by public officials can be bought. That is almost universally understood.

Corruption of the system is well on the way, when it allows favours even without payment, or payment without obvious favour. That is not so well understood.



Favours without payment



Mr Watkins acknowledged that he saw Dr Munro more readily than he would see members of the general public. He undoubtedly made representations for Dr Munro's and Mr Cassell's clients, more readily than he would for members of the general public. Mr Watkins and Mr Enderbury both lent their names and their positions to representations they did not know to be true. They did that because Dr Munro asked them to. They both showed favour to Mr Cassell and Dr Munro. They both said they received no payment for that.



If what they say is true, that is favour without payment.



One consequence is denial of the fundamental right of all citizens to equality of treatment at the hands of public officials. The more time spent on the favoured, the less there is available for others. People suffer unfairly, and the system fails, even if there was no payment. And how is the ordinary citizen who is kept waiting, or who misses out altogether, to be satisfied that there was no payment?



The next step is for those who are missing out, to try to share in the favoured treatment. How can they go about that? Mr Davison's argument must seem attractive to them. If they have to pay to get through the door, then those who can, and are prepared to, will. Those who cannot, or are not prepared to, will still miss out.



The corruption of the system will then be complete.



Payment without favour



Mr Beck knew of Ocean Blue's $25,000 gift to his party's funds. He helped arrange its receipt. At that very time, he was making representations to Ministers on behalf of the donors. He continued to do so, even when they were involved in a competitive process. He said he treated them no differently because of the gift.



If what he says is true, that is payment without favour.



But how is anyone to know whether he was influenced or not? How is he to know himself? He said that if he suspected an ulterior motive, there would have been 'no further support or action' from him. He was clearly doing something for them which he could do or not, as he chose.



It is impossible to expect people to have confidence in a system which allows public officials to receive money or benefits, directly or indirectly, from people with whom they are dealing in their official capacity.



Ocean Blue, after paying $25,000, were successful in achieving what they were seeking. Others missed out. It is not too cynical to suggest that those facts alone will be encouragement enough to others to do as Ocean Blue did, t