A concerned politician's guide to donations reform

'The basis for the implied freedom… Is that sections of the Constitution require that the houses of parliament be directly chosen by the people. To be a genuine choice, it must be a free choice that is capable of being an informed choice. Hence, political communication is impliedly necessary to allow the people to make a free and informed choice.

The defective NSW law, introduced in 2012, had embraced the Turnbull approach - a simple, omnibus law to prohibit donations from all persons not on the NSW electoral role, thereby ruling out foreigners, corporations and trade unions in one fell swoop. The first question for the Court was did this restrict the flow of political communication, which it clearly did - it reduced the amount of political advertising by a party, and the amount of information conveyed to voters and others.

But the key question was whether it was a 'reasonable and proportionate' limitation on the freedom, because restrictive laws will still be valid if they pursue legitimate ends via proportionate means. The High Court ruled that it had no obvious legitimate purpose, which meant no further question arose as to reasonable proportionality.

New South Wales, predictably, had argued that the ban on donations would reduce the risk of corruption and undue influence. The court accepted that caps imposed on donations and spending, which were not being challenged, might well be legitimate to deter corruption, but the prohibition on some donations but not others could not be. This discrimination was relevant because NSW had adduced no evidence to show that donations by non-voters would have a greater corrupting influence than other donations.

This is a brief sketch of the central issue in a difficult and complex case, and there is room for different interpretations, including whether this case does, as Dreyfus asserts, render donations from trade unions and corporations untouchable. After all, if caps are a legitimate response to corruption, a court might rule that caps of $1000 are a 'reasonably proportionate' means to achieve this legitimate goal. And if these caps apply to all donors no problem of discrimination will arise.

However that may be, on October 7^th 2015 the High Court handed down its decision in McCloy v NSW, which is now the leading authority on the implied freedom of political communication. It ruled that New South Wales laws which banned donations from property developers did notviolate the implied constitutional freedom.

The case was brought by Jeff McCloy, a property developer and former Lord Mayor of Newcastle who regularly made political donations. But because NSW laws banned donations from developers, he risked being found by ICAC to have engaged in 'corrupt conduct'. To pre-empt this he argued in the High Court that the ban was invalid by reason of the implied freedom of political speech.

In a major contribution to Australian constitutional jurisprudence the majority judgment of French CJ, Kiefer, Keane and Bell JJ re-affirmed the logic of inference the High Court had used in 1992 to recognize the implied freedom. But it then adopted the same logic to infer a countervailing principle, no less fundamental to the proper working of the Constitution.

The need for such a principle seemed clear from McCloy's claim that he had a right to donate money to 'build and assert political power'. Political power may be acquired by many means, his lawyers argued, and paying money to a party or elected member is but one. This argument, in effect a claim that he had a constitutional right to buy political influence was, in the High Court's view, a misconceived attempt to import into Australian law a US style jurisprudence of rights.

The Court noted that a right to 'build and assert political power' cited a phrase used in 1902 by Sir William Harrison Moore, an early constitutional scholar. Moore wrote that 'only by uninhibited publication can the flow of information be secured and people informed… only by freedom of speech… and of association can people build and assert political power.'

But as the majority noted, Moore had also written that 'the great underlying principle' of the Constitution was that the rights of individuals were sufficiently secured by ensuring each an equal share in political power'. It endorsed this view, adding that 'equality of opportunity to participate in the exercise of political sovereignty is also an aspect of the representative democracy guaranteed by our Constitution.'

The High Court elaborated on this principle by citing with approval the Supreme Court of Canada, which had upheld legislative restrictions on electoral advertising on the basis they were in accordance with 'the egalitarian model of elections adopted by Parliament as an essential component of our democratic society.' The Canadian Court explained that the premise for the model was equal opportunity for participation, that wealth is the major obstacle to equal participation, and that the state can pursue this aim by restricting the voices which dominate political discourse so others may also be heard. This creates a level playing field for those who wish to engage in the electoral discourse, and thus enables voters to be better informed; 'no one voice is overwhelmed by another.'