Money, It’s a Hit: Political Donation Laws and Hopper v Victoria [2026] HCA 11
Luke McNamara
3.7.2026
Pink Floyd satirically counselled in 1973 that we should ‘grab that cash with both hands and make a stash’. Political parties have certainly heeded their call.
In the three years before the 2025 federal election, political parties spent roughly $880 million on campaign activities – up some $176 million on the previous comparable cycle. Likewise, Climate 200, the donation-aggregating vehicle behind the Teal independents, has rewritten assumptions about who can credibly contest ‘safe’ seats. Even individuals have come under the spotlight, with Clive Palmer and Malcolm Turnbull’s private donations making headlines.
These episodes prompt the perennial question: how much money is too much, and how little is too little? Everyone seems to agree that elections becoming multi-billion dollar affairs like in the United States is too far, but no one can agree on the best solution.
Established parties resent newly funded insurgents, insurgents resent the war chests of the legacy parties, and no one resents their own money.
The result is a Goldilocks problem. A donation regime that is too permissive lets large donors capture decision-making. One that is too restrictive entrenches incumbents – those who built up resources before the rules changed, or who can rely on public funding allocated by past electoral success.
Australian legislatures have lately reached for cooler porridge. At Commonwealth level, reform legislation passed in February 2025 introduced caps on donations and on electoral expenditure, lowered the disclosure threshold, and substantially increased public funding, with the substantive caps to apply from the 2028 election. Before the Commonwealth acted, state regimes led the way. New South Wales started the push with the Electoral Funding Act 2018 (NSW), and the latest entrant into this pantheon is South Australia’s Electoral (Accountability and Integrity) Amendment Act 2024 (SA), which commenced 1 July 2025.
But in April 2026, the High Court reminded everyone that even careful drafting can produce regimes which effectively entrench the major parties. In Hopper v Victoria [2026] HCA 11 (Hopper), a unanimous Court declared the entirety of Pt 12 of the Electoral Act 2002 (Vic) (Electoral Act) – the political donations and expenditure regime – invalid.
This article addresses the structure of the Victorian scheme, and why, in the eyes of the High Court, it fell afoul of the implied freedom of political communication.
The Victorian Scheme and Its Carve-Out
Part 12 of the Electoral Act was substantially rewritten in 2018 to introduce a ‘general cap’ on political donations: indexed to $4,970 in 2025‑26, applied per donor per regulated entity, over an entire four-year election cycle (at [10]). It was, in the words of debate in the Legislative Council, designed to be ‘the lowest cap in Australia’. The cap was pitched as an anti-corruption measure, aimed at ‘minimis[ing] the influence of single donors’ and reducing the capacity of those with ‘deep pockets’ to wield disproportionate influence (at [42]).
For many of us concerned with free and fair elections, on the surface these amendments seem beneficial.
However, the regime contained a very sneaky carve-out. The definition of ‘gift’ (and so of ‘political donation’) excluded transfers between a registered political party and its ‘nominated entity’: an incorporated body satisfying eligibility criteria in s 222F. Two sets of criteria applied (at [17]-[18]):
A strict set applied under s 222F(2): the entity must be controlled (within the meaning of s 50AA of the Corporations Act 2001 (Cth)) by the registered party and operate for the sole benefit of party members; or
A looser set emerged in s 222F(3): the entity need only operate for the principal benefit of party members and need not be controlled by the party, but only if the entity was first appointed before 1 July 2020 (the time limitation).
The practical effect of these provisions was unsubtle. Only the Victorian divisions of the Labor, Liberal, and Nationals parties were appointed nominated entities before the time limitation expired. Their entities were already richly capitalised. The Liberals’ Cormack Foundation alone held net assets of $89,656,938 in June 2024, donating $1.5 million to the Party in 2022‑23. Labor’s nominated entity, the Labor Services & Holdings Trust held over $8.5 million in cash, with the Party receiving $4,598,000 from it in 2022‑23. The Nationals’ quaint-sounding yet gruesomely named Pilliwinks was smaller but operated similarly (at [24]-[26]).
So, how did this regime play out in effect? Well, individual donors could give the major parties no more than $4,970 each across an entire four-year cycle. However, given that these three parties had the benefit of the looser set of criteria outlined above, they could draw uncapped on pre-existing entity assets accumulated during the unregulated era. New parties and independents had no equivalent reservoir, and could not create one. An anti-avoidance offence in s 218B made it a crime to enter into a scheme designed to circumvent the cap by capitalising an entity prior to nomination (at [21], [38]). The ‘carrot’ of a nominated entity was, in practice, available only to those who had already eaten it.
Both the plaintiffs were subject to the regulatory stick with no corresponding carrot. On top of intending to run in 2026, Paul Hopper had run in Werribee as an independent in 2022 and 2025, and Melissa Lowe had run in Hawthorn as an independent in 2022.
The plaintiffs argued that the general cap operating with the nominated entity exception impermissibly burdened the implied freedom of political communication. Victoria conceded the time limitation in s 222F(3) was unconstitutional, but otherwise sought to defend the regime on the basis that the burden imposed by nominated entity exception was justified in pursuance of an anti-corruption purpose.
Seven Judges, Four Approaches
The Court produced four sets of reasons. All seven judges agreed that Pt 12 was wholly invalid, but their routes diverged.
The Joint Judgment – Gageler CJ, Gordon, Jagot and Beech-Jones JJ: the Orthodox Path
The joint judgment applied the standard framework when addressing the question of breaches of the implied freedom of political communication, posing three questions (at [27]):
Does the impugned law effectively burden freedom of communication about governmental or political matters in its terms, operation or effect? (effective burden);
Is the purpose of the law legitimate, in the sense that it is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government? (legitimate purpose); and
Is the impugned law reasonably appropriate and adapted to advance that purpose in a manner that is compatible with the maintenance of that constitutionally prescribed system of government? (justification).
The answer to the question of an effective burden was yes. The cap ‘effect[ed] “a restriction upon the funds available to [regulated persons or entities] to meet the costs of political communication”’ (at [29]) – an indirect but not insubstantial burden (at [29]‑[33], [40]). The burden was differential, applying differently to different political actors. The legislation (at [35]‑[39]):
permitted only registered political parties to appoint a nominated entity;
contained the time limitation in s 222F(3) which treated pre-July 2020 parties more favourably than post-July 2020 parties; and
meant in practice that the major parties' nominated entities had pre-existing capitalisation, accumulated without ever being subject to the cap, given that s 218B prevented new parties from replicating this advantage.
As regards the second question, that of legitimate purpose, the joint judgment recognised that the purpose of the law was legitimate. They accepted Victoria’s anti-corruption purpose as legitimate (at [42]‑[43]), and put aside the plaintiffs’ contrary submission that the regime had the illegitimate purpose of entrenching the major parties through an ‘abuse of incumbency’ (at [48]).
Despite this legitimate purpose, the joint judgment held the Electoral Act failed on the question of justification. The Electoral Act was not “reasonably appropriate and adapted to advance the legitimate anti-corruption purpose” (at [49]-[52]). In particular, Victoria had already accepted that the time limitation carve-out for pre-July 2020 registrations was not justified (at [50]). Having conceded as much, the State was stuck: the time limitation made the cap (in its operation with the nominated entity exception) constitutionally infirm (at [52]).
The Consequences of Invalidity
Given that the time limitation was invalid, the question was how much of the Electoral Act the Court would cut out.
The joint judgment methodically worked through each option proposed by the parties, and were unconvinced by each of them (at [55]-[67]):
Severing the time limitation alone would leave ss 222F(2) and (3) operating as two contradictory eligibility criteria simultaneously – one stricter, one looser, and both available at all times.
Severing para (j) of ‘gift’ would render the nominated entity scheme redundant (the ‘carrot’ of uncapped flow would vanish, but the ‘stick’ of regulatory burdens would remain), and would have widespread effects on disclosure and other Pt 12 provisions that were not themselves impugned.
Severing all references to nominated entities would amount to ‘major surgery’ and would expose the existing nominated entities to regulation as ‘associated entities’ or ‘third party campaigners’ – ‘the opposite of what Parliament intended’ (at [65]-[66]).
Severing Division 3B (the cap itself) was untenable because the increased public funding in Division 2 was designed to operate only alongside the cap.
The only available option, then, was to declare Pt 12 of the Act totally invalid (at [68]).
Justice Edelman – A Methodological Variation
Justice Edelman reached the same outcome by a different route. His Honour started by identifying the challenged law: not Pt 12 in general, but s 222F(3) specifically, being the rule that created the time limitation carve-out (at [98]‑[103]). His Honour then moved to the purposes of that provision: first, preserving the ‘war chest’ of the three pre-2018 parties (legacy parties purpose); and, second, excluding everyone else from accumulating an equivalent (exclusion purpose) (at [109]).
Although Victoria framed its concession as to the latter purpose as one of disproportionality (the time limitation being a disproportionate means to s 222F(3)’s purpose), Edelman J found that puzzling – the means seemed perfectly proportionate to the exclusion purpose. The concession could only really be understood as a concession that the exclusion purpose was itself illegitimate (at [111]‑[114]). Inseverability then dragged the rest of Pt 12 down with this section (at [116]‑[121]).
Most interestingly, Edelman J questioned the future of ‘structured proportionality’, the framework adopted by a majority of the High Court in McCloy v New South Wales (2015) 257 CLR 178 (McCloy). Structured proportionality seeks to explain the justification question by asking whether the impugned law is suitable (rationally connected to its purpose), necessary (no obvious and compelling less-restrictive alternative), and adequate in its balance (the importance of the purpose justifying the extent of the burden) (McCloy at [2]).
In Edelman J’s estimation, the first limb (suitability) is ‘redundant’ because purpose is identified objectively – a purpose that is not rationally connected with the law’s effect cannot be the purpose of the law. The third limb (adequacy in balance) ‘has little role to play’. Only the necessity inquiry seems useful (at [86]‑[87]). Given the recent ‘antipathy’ of a majority of the Court, Edelman J suggests ‘a test based on structured proportionality should now be treated as dead’, though the necessity inquiry, as the ‘baby’ rather than the bathwater, should survive in some form (at [87]). This conclusion accords with the reservations His Honour expressed about the first and third limbs of the test in cases such as Ravbar v Commonwealth [2025] HCA 25 (at [215]) and Babet v Commonwealth [2025] HCA 21 (at [183]-[184]).
That is a striking obituary, even if a partial one. It also coheres with Edelman J’s concern that the implied freedom should be analysed by reference to purpose rather than abstract balancing.
Justice Steward – Sceptical Concurrence
Justice Steward joined the result on the basis of Victoria’s concession, while noting that ‘but for that concession’ his analysis might have run differently (at [124]).
Two observations stand out.
First, Steward J’s reasons read as a quiet protest about whether judges are well-placed to determine the meaning of a ‘level playing field’ in the context of expenditure caps (and political finance models more generally) (at [126]-[127]). Justice Steward suggested that remitting fact-finding to the Federal Court might be preferable in a future case (at [130]).
Second, and more pointedly, Steward J observed that the impugned exception, ‘if anything, enhanced the capacity of those eligible [Registered Political Parties], and their members and candidates, to make political communications; it did not reduce that capacity’ (at [131], emphasis in original). In Steward J’s reasoning, the doctrinal logic for striking down a law that enables more political communication, on the basis that the implied freedom protects political communication, is at least worth pausing on.
Justice Gleeson – An Abuse of Incumbency?
Justice Gleeson noted that Victoria’s ‘narrow concession’ had ‘far-reaching consequences’ (at [139]). One of those consequences was that Her Honour put aside one of the two contentions advanced by the plaintiffs. The plaintiffs had argued both that the impugned provisions had an illegitimate purpose (favouring incumbents — an ‘abuse of incumbency’), and, if that contention failed, that the provisions could not be justified. Victoria’s concession resolved the second, leaving open the more interesting question of when an abuse of incumbency could become an illegitimate purpose (at [136]‑[139]).
Nevertheless, Gleeson J touched on this interesting question again when analysing the justification for the burdens. Justice Gleeson emphasised that the differential operation of the regime ‘warrants close scrutiny’. Her Honour pointed to potential for the major parties to ‘outspend other regulated actors and to drown out other voices’ (at [163]). So, when does favouring incumbents – through public funding linked to past performance, or by grandfathering pre-regulation assets – cross from the inevitable consequence of any prospective regime into an illegitimate purpose? Hopper invites the question without answering it.
Conclusion – Searching for the Goldilocks Zone
What does this mean for the election donation caps now in place across Australia?
In short, there is no neutral way to introduce a donation cap onto a political landscape that already has incumbents with assets. Every prospective reform implicitly chooses between two unequal worlds: one in which the existing power structure is grandfathered into the new regime, and one in which it is dismantled. In making these explicit choices, the legislature has to determine whose advantages are preserved and whose are not. As the High Court has firmly reminded us in Hopper (and earlier cases such as McCloy), these choices will be tested against the implied freedom of political communication whenever the trade-off is uneven enough to notice.
In fact, there may be no true Goldilocks zone between limiting political donations and unfairly entrenching an unlevel playing field. Hopper shows that even a regime introduced with a stated anti-corruption purpose can fall when the design choices reveal, or are open to being characterised as, an improper purpose of preserving incumbent advantage
As Climate 200 is gearing up to challenge the Commonwealth reforms to election funding in the High Court, these questions may be litigated again soon. The federal scheme caps donations and electoral expenditure, but it also dramatically expanded public funding tied to past first-preference vote share – a metric that, by definition, advantages parties that performed well last time. Critics have called this a “stitch-up” which hands a permanent advantage to the major parties packaged as anti-corruption reform. Nevertheless, these reforms arguably do enhance democracy in some ways.
Hopper does not decide the question of the validity of these reforms, and the legislation differs (no equivalent of the nominated entity device exists federally). But the underlying pattern of incumbents legislating for their own continued advantage under the banner of integrity is the same issue flagged by Gleeson J, and which the plaintiffs’ first contention puts squarely on the table for the next case.
For the Victorian Parliament, the immediate consequence was the hurried redrafting of Pt 12 in time for the November 2026 State election. For Commonwealth reformers, Hopper is a flashing yellow light. For Australia’s politicians and legislators more broadly, perhaps the immortal words of Pink Floyd can provide some more guidance:
Money, it's a crime
Share it fairly, but don't take a slice of my pie
Money, so they say
Is the root of all evil today …
Luke McNamara is a Tuckwell Scholar at the Australian National University, completing a combined Bachelor of Arts and Bachelor of Laws (Hons) specialising in Public Law and Commercial Law.
Suggested citation: Luke McNamara, ‘Money, It’s a Hit: Political Donation Laws and Hopper v Victoria [2026] HCA 11’ (3 July 2026) <https://www.auspublaw.org/blog/2026/7/money-its-a-hit-political-donation-laws-and-hopper-v-victoria-2026-hca-11>