Key Takeaways
- The High Court invalidated Victoria’s campaign‑finance legislation, removing limits on political donations and disclosure requirements.
- Labor, the Liberal‑National Coalition and their long‑standing “nominated entities” (legacy investment funds) may have to return millions of dollars received since the laws were overturned, as the funds can no longer be used for state‑election campaigning.
- Legal advice obtained by the state government advises that money already transferred from these entities cannot lawfully finance the upcoming November election.
- Premier Jacinta Allan’s administration is negotiating with the Coalition and crossbench MPs to reinstate donation caps, proposing an annual limit of at least $10,000 (potentially $25,000 if a deal is reached).
- The proposed caps would not apply fully until after the state election; for the current financial year parties could accept up to $5,000 now and another $5,000 from July 1, with the legislation made retrospective to the High Court’s decision.
- Independent candidates are receiving significant support from Climate 200, which has contributed $40,000 to two independents’ campaigns and $140,000 in administrative funding, highlighting concerns that major parties retain financial advantages.
- The Victorian Electoral Commission has removed public data on payouts from nominated entities, complicating transparency efforts.
- Ongoing talks aim to balance party funding needs with calls for a more level playing field for independents and minor parties.
Background on the Donation Law Overhaul
In 2018 Victoria overhauled its electoral funding regime, introducing strict donation caps while carving out an exception for certain legacy investment funds known as “nominated entities.” These funds—such as the Liberal Party’s Cormack Foundation and Labor’s Labor Services and Holdings—were allowed to contribute unlimited amounts to the major parties, a provision that had endured for decades. The arrangement was justified as a way to preserve traditional fundraising channels while curbing the influence of large individual donors.
High Court Ruling and Its Immediate Impact
Last month the High Court struck down Victoria’s donation laws after a challenge by independent candidates Paul Hopper and Melissa Lowe, who argued the carve‑out unfairly restricted political communication. The judgment effectively abolished all donation caps and disclosure requirements, leaving a legal vacuum in which any amount of money could be donated without reporting. The decision took effect on 15 April, instantly altering the financial landscape for the upcoming state election scheduled for November.
The Role of Nominated Entities
Nominated entities are essentially trust‑like structures that have accumulated wealth from sources such as property sales and media assets. The Cormack Foundation, for example, is valued at roughly $120 million, while Labor Services and Holdings reported $6.8 million in payments to the Victorian branch in the 2024‑25 financial year. Historically, these funds have funneled millions into state‑election campaigns, providing the major parties with a reliable cash reserve independent of individual donor limits.
Legal Advice on Repayment Obligations
Following the High Court’s decision, the Allan government sought legal counsel on whether money already received from nominated entities could still be used for campaigning. Three anonymous sources familiar with the discussions told The Age that the advice indicates the parties must repay any funds received during the current parliamentary term if they intend to spend them on the November election. The rationale is that, without the statutory carve‑out, those contributions now constitute impermissible donations under the reinstated (or yet‑to‑be‑enacted) rules.
Estimated Financial Exposure
Estimates of the repayment burden vary. One source suggested the amount to be returned could exceed $1 million. The Cormack Foundation disclosed $8.1 million in donations to the Victorian Liberal Party between the 2022 and 2025 financial years, though a portion of that sum supported federal campaigns unaffected by the state ruling. Labor’s disclosed $6.8 million also includes federally permissible transfers, complicating the precise calculation of what must be clawed back for state‑election use.
Government’s Legislative Response
Premier Jacinta Allan is leading negotiations with the Coalition and crossbench MPs to craft replacement legislation. The government’s initial proposal seeks to raise the annual donation cap from its current $5,000 to at least $10,000, with openness to a $25,000 cap should a broader agreement be reached. To avoid disadvantaging parties during the interim, the bill would allow donations of up to $5,000 for the remainder of the financial year and another $5,000 from July 1, with the new limits made retrospective to 15 April.
Transparency and Data Removal Concerns
After the judgment, the Victorian Electoral Commission took down its public database showing how much each nominated entity had paid out since 2022. This removal has hindered watchdogs and journalists from tracking the flow of funds. Independent researcher Simon Holmes a Court’s “Wall of Advantage” website attempted to fill the gap by publishing figures drawn from pre‑removal data, underscoring the difficulty of maintaining transparency when official sources are withdrawn.
Support for Independent Candidates
While the major parties grapple with potential repayment liabilities, independents have received a boost from Climate 200. The organization contributed $40,000 each to the campaigns of Sophie Torney (challenging Opposition Leader Jess Wilson in Kew) and Shima Ibuki (running against former Liberal leader John Pesutto in Hawthorn). Additionally, Climate 200 supplied $140,000 in administrative funding to those candidates, a resource available to any elected party or independent. Torney warned that, regardless of the eventual caps, the proposed changes are unlikely to substantially narrow the financial gap between major parties and independents.
Broader Implications for Victoria’s Political Funding
The episode reveals a tension between preserving established party fundraising mechanisms and ensuring a fair electoral contest. Labor and the Coalition argue that access to nominated entities is essential for competitive campaigning, while reform advocates contend that the carve‑out entrenches incumbent advantages and undermines the spirit of donation caps. The outcome of the current negotiations will shape not only the financing of the November state election but also the precedent for how Victoria handles legacy funds in future electoral cycles.
End of summary.