NSW legislation that places lower spending caps on third-party campaign groups is being challenged in the high court

This article is more than 1 year old

This article is more than 1 year old

New South Wales campaign finance laws, which set lower spending caps for campaigning by “third party” groups – such as unions and charities – than the caps for political parties, are unconstitutional because they are designed to handicap “disfavoured voices”, unions have argued.

Unions NSW has made the submission to the high court in a challenge that could become Australia’s equivalent to the United States’ Citizens United case, which will decide the constitutionality of restrictions on third-party political campaigns in state and federal law.

The case is the second chapter in a long-running antagonism between unions and the Coalition government, after Unions NSW won a high court challenge in 2013 against a law providing that only electors could make political donations, effectively banning union and corporate donations.

Unions NSW and five of its member unions are challenging the Berejiklian government’s Electoral Funding Act, which restricts registered third-party campaigners to spending $500,000 in the six months before an election, a cut of more than 50% compared with the $1.05m limit in the law it replaced.

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By comparison, political parties can spend up to $11.4m if they run candidates in every seat or $1.3m if they run an upper house ticket and 10 or fewer lower house candidates.

The unions, represented by the former commonwealth solicitor general Justin Gleeson, say the law breaches the implied freedom of political communication in the commonwealth constitution, which also governs state electoral laws.

That is because the law has “a discriminatory effect on certain sources of political communication or political viewpoints”, they submitted.

Their submissions warn that the spending cap will handicap unions, religious groups, charities, ethnic associations, crowdfunding entities and business organisations in expressing political views on behalf of members.

The unions argued that in precedent cases the court had shown the correct approach to permissible restrictions was to consider whether laws were designed to “level the playing field” by facilitating equality of access to the political process.

But a law that “affords political parties a privileged position in political debate is not compatible with our constitutionally prescribed system of government”, their submissions said.

“Far from simply preventing domination of the debate by powerful corporations or well-resourced citizens, the [third-party campaigner] expenditure cap will in practice restrict non-wealthy voices in their attempts to channel their limited individual political power into advertising campaigns of sufficient scale to reach state electors.”

The unions acknowledged that political parties were unlike other interest groups because they tried to get candidates elected.

They refuted the idea that that created “some greater entitlement to communicate their views”, arguing that it would undermine the ability for external groups to be a check on majoritarianism and the incumbency of current elected officials.

In its defence, the NSW government submitted that the purpose of the law was “to limit the influence … [on] the electoral process of large amounts of money by reducing … the demand for large donations”.

The NSW special minister of state, Anthony Roberts, had told parliament the purpose of lowering the cap was to “guard against third parties dominating election campaigns”.

The new cap would allow “third party campaigners to reasonably present their case while ensuring that the caps are in proportion to those of parties and candidates who directly contest elections”, he said in his second reading speech.

The NSW government – represented by the solicitor general Michael Sexton – argued that the unions had proceeded on “the erroneous assumption that equality of opportunity to participate in an electoral contest requires equal treatment of those who are directly engaged in the contest and those who are not so engaged”.

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It said “differential treatment of parties and candidates is not of itself illegitimate”.

That is because the constitution protects a choice “between candidates for office … not a choice between ideas, policies, views or beliefs”.

An expert panel on political donations convened by the government had “strongly agree[d] that political parties and candidates should have a privileged position in election campaigns” because they were “directly engaged in the electoral contest”, and were “the only ones able to form government and be elected to parliament”, the submissions said.

The NSW government noted that political parties had to spend money on the “practical cost of being (serious) candidates” including advertising, distributing how-to-vote cards, manning polling stations and organising volunteers.

They said the unions had failed to show that third-party campaigners were not given “sufficient scope to run campaigns to influence voting at an election”.