Liberal National party lawyers say state’s ban will apply to federal elections and that would be unconstitutional

This article is more than 1 year old

This article is more than 1 year old

The Liberal National party will argue in a high court challenge that the influence of developer donations on politics is less of a problem in Queensland than in New South Wales.

The LNP president, Gary Spence, has launched a high court challenge against Queensland’s ban on developer donations, arguing that it breaches the implied freedom of political communication and clashes with the federal electoral laws that allow them.

The commonwealth attorney general, Christian Porter, has also intervened in the case to argue that Queensland donation laws – including the ban on developers – should not apply to federal elections.

In 2015, the high court upheld the constitutionality of NSW’s ban on developer donations in the landmark McCloy case.

The majority found that the aim of preventing “corruption and undue influence” in politics and the ban were “not only compatible with the system of representative government; they preserve and enhance it”.

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In a preliminary hearing on Tuesday, Spence’s counsel, Peter Hastie, told the court that rather than seeking to overturn the McCloy decision, the LNP would seek to “distinguish it on the facts”.

Hastie said an “important component” of the case was “the existence at that time of facts which gave rise to a legitimate concern that the law was valid”.

“The facts in Queensland do not demonstrate the same concern about the effect of the donations by property developers.”

Queensland banned developer donations on the recommendation of its corruption watchdog in 2017 to combat perceptions that secretive, wealthy donors had “compromised” local government.

The move followed revelations that the Gold Coast deputy mayor, Donna Gates, voted more than 30 times in favour of developments linked to donors who gave tens of thousands of dollars to her 2016 election campaign, and reports of large – but legal – donations from Walker Group Holdings and Wingate Properties to Labor and the LNP.

Hastie said the Queensland developer donation ban “will also apply to federal elections and that is not permitted by the constitution” because federal parliament has the “exclusive power” to regulate federal elections and the state law is inconsistent with the Commonwealth Electoral Act.

The federal bill to ban foreign political donations contains provisions to deal with that issue, providing that state law does not apply to donations used in federal elections.

The bill – which passed the Senate on 15 November and is due to be considered by the lower house in the final sitting fortnight – would mean that property developers can donate to the Queensland LNP provided donations are spent on federal campaigns or are kept separate from state donations.

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Hastie said the bill “might be thought to neutralise the attempt by the Queensland parliament to prohibit property developers” donating to parties for federal campaigns.

He said Spence’s lawyers would amend their submissions if the federal bill passed, but signalled that they would still press the case because “there might be all sorts of debates about its effect” and it may not fix the constitutional issue.

Spence declined to comment on the bill. “The high court challenge is fully under way,” he said. “We are working towards a hearing early in the new year.”

Justice Stephen Gageler indicated the case was likely to go before the full court in February and made orders for a further directions hearing on 5 December.

The commonwealth government has intervened in Spence’s case as well as the Awabdy case, a separate challenge against the Queensland developer donation ban now awaiting judgment in the Queensland court of appeal.

A spokesman for Porter said that since both cases raised “important questions about the power to regulate elections, the commonwealth attorney general has intervened to assist the court on questions of constitutional principle”.

On 5 December, the high court will hold a full hearing into Unions NSW’s appeal against NSW campaign finance laws, which set lower spending caps for campaigning by “third party” groups.

The commonwealth has intervened in that case to defend the constitutionality of the state’s cap of $500,000 for third-party campaigns in the six months preceding the state elections.