Case Summary: Unions NSW & Ors v. State of New South Wales [2023] HCA 4

Full Case

Judgment Summary

 High Court Strikes Down NSW Electoral Expenditure Cap: Unions NSW & Ors v State of New South Wales [2023] HCA 4

Introduction

In a landmark decision for political campaigners and advocates of free political communication, the High Court of Australia has invalidated a key provision of New South Wales’ electoral funding laws. The case, Unions NSW & Ors v State of New South Wales [2023] HCA 4, scrutinised the constitutionality of strict expenditure caps imposed on third-party campaigners, with significant implications for democratic participation and the regulation of election spending in Australia.

Background: The Challenge to NSW’s Electoral Funding Act

The dispute centred on the Electoral Funding Act 2018 (NSW) (“EF Act”), which regulates how much individuals and organisations—other than political parties and candidates—can spend to influence election outcomes. The plaintiffs, a group of registered third-party campaigners (TPCs), argued that two provisions of the EF Act—sections 29(11) and 35—unjustifiably restricted their ability to participate in political discourse, thereby infringing the implied freedom of political communication protected by the Australian Constitution.

• Section 29(11) imposed a cap of $20,000 (indexed) on electoral expenditure by TPCs during the period leading up to a by-election for the NSW Legislative Assembly.
• Section 35 (since repealed) made it an offence for TPCs to act “in concert” with others to exceed the expenditure cap.

Key Legal Issues

The High Court was asked to determine:

1. Whether section 29(11) of the EF Act impermissibly burdened the implied freedom of political communication.
2. Whether the Court had jurisdiction to consider the validity of section 35 after its repeal.
3. Whether, if jurisdiction existed, the Court should exercise its discretion to rule on section 35.
4. If so, whether section 35 was also constitutionally invalid.
5. How costs should be allocated, particularly given the State’s concession regarding section 29(11).

The High Court’s Decision

Section 29(11) Declared Invalid

The High Court held by majority that section 29(11) was invalid. The cap of $20,000 on third-party campaigners’ electoral expenditure was found to impose an unjustified burden on the implied freedom of political communication. The Court applied the structured proportionality test from McCloy v New South Wales (2015) 257 CLR 178, concluding that while regulating electoral expenditure is a legitimate objective, the cap was not appropriately tailored or justified. Notably, the State of NSW conceded the provision’s invalidity after a parliamentary committee recommended a much higher cap.

No Jurisdiction Over Repealed Section 35

The Court unanimously found it lacked jurisdiction to rule on the validity of section 35, as it had been repealed before the hearing. The plaintiffs were no longer subject to the law, and thus there was no “matter” for the Court to decide, as required by Chapter III of the Constitution. The Court reaffirmed that judicial review of repealed laws requires a live controversy with ongoing legal consequences.

Costs

The State of NSW was ordered to pay the plaintiffs’ costs in relation to the successful challenge to section 29(11). For the issues relating to section 35, each party was left to bear their own costs.

Implications and Takeaways

This decision reinforces the principle that electoral laws must not disproportionately restrict political communication. While governments may seek to ensure electoral integrity by regulating campaign spending, such measures must be carefully justified and proportionate to their aims. The High Court’s ruling builds on previous decisions scrutinising electoral finance laws, making clear that overreaching restrictions will not withstand constitutional challenge.

For third-party campaigners, advocacy groups, and anyone interested in the intersection of law and democracy, this case is a timely reminder of the courts’ role in safeguarding the constitutional freedoms essential to robust political debate.

Conclusion

Unions NSW & Ors v State of New South Wales is a significant affirmation of the implied freedom of political communication in Australia. It underscores the need for electoral laws to strike a careful balance between regulating campaign finance and preserving the democratic right to participate in political discourse. As electoral laws continue to evolve, this decision will serve as a touchstone for future debates on the limits of government regulation in the political arena.

If you are a third-party campaigner, advocacy organisation, or political participant seeking legal guidance on electoral laws or freedom of political communication, Pentana Stanton Lawyers is here to help. Our experienced legal team can assist you in navigating complex constitutional and administrative law matters.

Contact us today to safeguard your rights and ensure compliance with Australia’s legal framework for democratic participation.