A constitutional challenge to electoral finance law

In early 2025, two candidates took an extraordinary step: they brought a constitutional law challenge to the High Court of Australia against part of Victoria’s political donation regime. The plaintiffs argue that the way Victoria regulates donations, especially the 'nominated entity exception', impermissibly burdens the implied freedom of political communication under the Australian Constitution.

This is not a mere complaint about unfair rules. It is a test of how electoral finance law interacts with constitutional protections that underpin representative government.

Who Are the Plaintiffs and What Are They Challenging?

The plaintiffs, Paul Hopper and Melissa Lowe, are independent political actors who have directly engaged with Victoria’s electoral system. Hopper contested the 2025 Werribee state by‑election and is now establishing a minor party, The West Party Inc, with plans to contest multiple seats in the 2026 state election.

Lowe previously ran as an independent in the 2022 Hawthorn state election and has publicly announced that she intends to again run as an independent in 2026. As candidates, both are bound by Part 12 of the Electoral Act 2002 (Vic) and the associated political donations regime.

Their legal challenge does not target all of Part 12. Instead, it focuses on how Part 12 operates in conjunction with a specific exception, the 'nominated entity exception', in the statutory definition of “gift” in section 206(1)(j).

The Law in Dispute: Part 12 and the Nominated Entity Exception

In 2018, the Victorian Parliament amended the Electoral Act to impose caps on political donations and, indirectly, on political expenditure. Under the general scheme, donations to political actors are capped at a modest statutory figure for each four‑year period. However, the law includes an exception for what it calls a nominated entity: an entity associated with a registered political party that, because it existed prior to the reform, can make donations and transfers outside the cap.

The practical result of this exception is that major parties with longstanding nominated entities, such as the Labor Party, Liberal Party and Nationals, can channel significant funds to their campaign arms without respect to the caps that otherwise apply. By contrast, independents and newer minor parties are prohibited from establishing similar entities or from drawing on accumulated funds above the cap.

The plaintiffs accept that the general donation cap would be constitutionally permissible standing alone. Their constitutional complaint is narrow but potent: it is the nominated entity exception that they say creates a disparate regime that imposes an impermissible burden on the implied freedom of political communication.

The Constitutional Basis: Implied Freedom of Political Communication

Australia’s Constitution does not contain an explicit Bill of Rights. It does not, for example, expressly guarantee free speech. However, since the early 1990s, the High Court has recognised an implied freedom of political communication arising from the text and structure of the Constitution.

This freedom is not a personal right in the American sense but a restriction on legislative and executive power: laws cannot unduly burden political discussion that is necessary for a functioning system of representative government.

Under the implied freedom doctrine, a law is tested for both its purpose and its effect on political communication. A law that imposes an unjustified or disproportionate restriction on the ability of candidates or political actors to communicate with the electorate may be unconstitutional.

In this case, the plaintiffs argue that the nominated entity exception gives entrenched political parties a structural advantage in funding political communication, leaving independents and new parties unable to compete. They say that disadvantage is not a mere financial imbalance but a constitutional problem: it burdens the free flow of political ideas and limits meaningful participation in public debate.

legal considerations

The plaintiffs have filed a Special Case in the High Court, formally framing the constitutional questions for determination. They argue:

• Part 12 imposes caps on donations and thus on political communication in the electoral context.

• The nominated entity exception, by allowing major parties to access uncapped funds, discriminates between classes of political actors without sufficient constitutional justification.

• As a result, Part 12, as presently constituted and applied, impermissibly burdens the implied freedom of political communication under the Constitution, and should be invalid, wholly or in part, to the extent that it operates with the nominated entity exception.

  
  

The defendant State of Victoria has filed submissions defending the law as a legitimate regulatory framework aimed at transparency and integrity in elections. Meanwhile, the Attorney‑General of the Commonwealth intervened, signalling broader federal interest in how the implied freedom doctrine is to be applied to electoral finance laws.

Why the Case Matters: Constitutional Doctrine and Democratic Participation

This case is significant for several reasons:

1. It tests the implied freedom in the context of political finance regulation.

While the High Court has applied the implied freedom doctrine to campaign advertising, protest laws and spending caps, Hopper & Anor addresses how funding mechanisms - especially exemptions that benefit established parties intersect with the constitutional protection of political communication.

2. It raises fundamental questions about equity in political competition.

The plaintiffs’ argument extends beyond fairness rhetoric. They contend that a regime which structurally advantages entrenched entities over new entrants chills the diversity of political discourse, which is at the heart of representative government. This is a constitutional argument grounded in democratic function, not merely personal grievance.

3. It could have broader impact on other jurisdictions.

Donations and funding laws in other states or at federal level containing similar “nominated entity”-like provisions may be vulnerable to the same constitutional scrutiny if Hopper succeeds, drawing a line between regulatory purpose and constitutional effect.

Conclusion

At its core, Hopper & Anor v State of Victoria is a constitutional law challenge that probes how far a legislature may regulate political finance without infringing the structural guarantees of political communication that sustain Australia’s representative system.

It is not merely a contest of financial advantage; it is a legal inquiry into whether a statutory exemption entrenches political power in a way that undermines the Constitution’s implied restrictions on legislative authority.

The High Court’s eventual ruling will clarify how the implied freedom doctrine applies to the architecture of electoral financing - a question with implications for the shape of democratic participation across Australia.