McCloy v New South Wales

HIGH COURT OF AUSTRALIA

FRENCH CJ,
KIEFEL, BELL, GAGELER, KEANE, NETTLE AND GORDON JJ

JEFFERY RAYMOND McCLOY & ORS  PLAINTIFFS

AND

STATE OF NEW SOUTH WALES & ANOR  DEFENDANTS

McCloy v New South Wales

[2015] HCA 34

7 October 2015

S211/2014

ORDER

The questions stated by the parties in the special case dated 28 January 2015 and referred for the opinion of the Full Court be answered as follows:

Question 1

Is Division 4A of Part 6 of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid (in whole or in part and, if in part, to what extent) in its application to the plaintiffs because it impermissibly burdens the implied freedom on communication on governmental and political matters contrary to the Commonwealth Constitution?

Answer

In so far as Division 4A prohibits the making by a property developer of a political donation or acceptance of a political donation from a property developer, it is not invalid. It does not impermissibly burden the implied freedom of communication on governmental and political matters contrary to the Constitution.

Question 2

Is Division 2A of Part 6 of Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid (in whole or in part and, if in part, to what extent) in its application to the plaintiffs because it impermissibly burdens the implied freedom of communication of governmental and political matters contrary to the Commonwealth Constitution?

Answer

No.

Question 3

Is s 96E of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid in its application to the plaintiffs because it impermissibly burdens the implied freedom of communication of governmental and political matters contrary to the Commonwealth Constitution?

Answer

No.

Question 4

Who should pay the costs of the special case?

Answer

The plaintiffs.

Representation

D M J Bennett QC with I D Faulkner SC, A K Flecknoe-Brown and B A Mee for the plaintiffs (instructed by Toomey Pegg Lawyers)

M G Sexton SC, Solicitor-General for the State of New South Wales and J K Kirk SC with A M Mitchelmore for the first defendant (instructed by Crown Solicitor (NSW))

Submitting appearance for the second defendant

Interveners

J T Gleeson SC, Solicitor-General of the Commonwealth with C L Lenehan for the Attorney-General of the Commonwealth, intervening (instructed by Australian Government Solicitor)

G R Donaldson SC, Solicitor-General for the State of Western Australia with K A T Pedersen for the Attorney-General for the State of Western Australia, intervening (instructed by State Solicitor (WA))

P J Dunning QC, Solicitor-General of the State of Queensland with A D Keyes for the Attorney-General of the State of Queensland, intervening (instructed by Crown Law (Qld))

M G Evans QC with D F O'Leary for the Attorney-General for the State of South Australia, intervening (instructed by Crown Solicitor (SA))

K L Walker QC with A D Pound for the Attorney-General for the State of Victoria, intervening (instructed by Victorian Government Solicitor)

Notice:  This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

McCloy v New South Wales

Constitutional law – Implied freedom of communication on governmental and political matters – Provisions of Election Funding, Expenditure and Disclosures Act 1981 (NSW) impose cap on political donations, prohibit property developers from making such donations, and restrict indirect campaign contributions – Whether provisions impermissibly burden implied freedom of political communication.

Words and phrases – "appropriate and adapted", "deference", "implied freedom of communication on governmental and political matters", "margin of appreciation", "proportionality".

Constitution, ss 7, 24, 62, 64, 128.
Election Funding, Expenditure and Disclosures Act 1981 (NSW), Pt 6, Divs 2A, 4A, s 96E.

FRENCH CJ, KIEFEL, BELL AND KEANE JJ.

Introduction

1. The Election Funding, Expenditure and Disclosures Act 1981 (NSW) ("the EFED Act") imposes restrictions on private funding of political candidates and parties in State and local government elections in New South Wales. The plaintiffs contend in this special case that provisions of the EFED Act, which impose a cap on political donations, prohibit property developers from making such donations, and restrict indirect campaign contributions, are invalid for impermissibly infringing the freedom of political communication on governmental and political matters (hereinafter "the freedom"), which is an implication from the Australian Constitution.

2. As explained in the reasons that follow, the question whether an impugned law infringes the freedom requires application of the following propositions derived from previous decisions of this Court and particularly Lange v Australian Broadcasting Corporation[1] and Coleman v Power[2]:

   [1](1997) 189 CLR 520; [1997] HCA 25.

   [2](2004) 220 CLR 1; [2004] HCA 39.

   A.The freedom under the Australian Constitution is a qualified limitation on legislative power implied in order to ensure that the people of the Commonwealth may "exercise a free and informed choice as electors."[3] It is not an absolute freedom. It may be subject to legislative restrictions serving a legitimate purpose compatible with the system of representative government for which the Constitution provides, where the extent of the burden can be justified as suitable, necessary and adequate, having regard to the purpose of those restrictions.

   [3]Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 560.

   B.The question whether a law exceeds the implied limitation depends upon the answers to the following questions, reflecting those propounded in Lange as modified in Coleman v Power: 

   1.Does the law effectively burden the freedom in its terms, operation or effect? 

   If "no", then the law does not exceed the implied limitation and the enquiry as to validity ends.

   2.If "yes" to question 1, are the purpose of the law and the means adopted to achieve that purpose legitimate, in the sense that they are compatible with the maintenance of the constitutionally prescribed system of representative government[4]?  This question reflects what is referred to in these reasons as "compatibility testing".

   The answer to that question will be in the affirmative if the purpose of the law and the means adopted are identified and are compatible with the constitutionally prescribed system in the sense that they do not adversely impinge upon the functioning of the system of representative government.

   If the answer to question 2 is "no", then the law exceeds the implied limitation and the enquiry as to validity ends.

   3.If "yes" to question 2, is the law reasonably appropriate and adapted to advance that legitimate object[5]?  This question involves what is referred to in these reasons as "proportionality testing" to determine whether the restriction which the provision imposes on the freedom is justified.

   The proportionality test involves consideration of the extent of the burden effected by the impugned provision on the freedom.  There are three stages to the test – these are the enquiries as to whether the law is justified as suitable, necessary and adequate in its balance in the following senses:

   suitable — as having a rational connection to the purpose of the provision[6];

   necessary — in the sense that there is no obvious and compelling alternative, reasonably practicable means of achieving the same purpose which has a less restrictive effect on the freedom;

   adequate in its balance — a criterion requiring a value judgment, consistently with the limits of the judicial function, describing the balance between the importance of the purpose served by the restrictive measure and the extent of the restriction it imposes on the freedom.

   If the measure does not meet these criteria of proportionality testing, then the answer to question 3 will be "no" and the measure will exceed the implied limitation on legislative power.

   [4]Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 561-562, 567.

   [5]Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 562.

   [6]Unions NSW v New South Wales (2013) 252 CLR 530 at 558‑559 [55]-[56]; [2013] HCA 58.

3. As noted, the last of the three questions involves a proportionality analysis. The term "proportionality" in Australian law describes a class of criteria which have been developed by this Court over many years to determine whether legislative or administrative acts are within the constitutional or legislative grant of power under which they purport to be done. Some such criteria have been applied to purposive powers; to constitutional legislative powers authorising the making of laws to serve a specified purpose; to incidental powers, which must serve the purposes of the substantive powers to which they are incidental; and to powers exercised for a purpose authorised by the Constitution or a statute, which may limit or restrict the enjoyment of a constitutional guarantee, immunity or freedom, including the implied freedom of political communication. Analogous criteria have been developed in other jurisdictions, particularly in Europe, and are referred to in these reasons as a source of analytical tools which, according to the nature of the case, may be applied in the Australian context.

4. Acceptance of the utility of such criteria as tools to assist in the determination of the limits of legislative powers which burden the freedom does not involve a general acceptance of the applicability to the Australian constitutional context of similar criteria as applied in the courts of other jurisdictions.  It does not involve acceptance of the application of proportionality analysis by other courts as methodologically correct.  The utility of the criteria is in answering the questions defining the limits of legislative power relevant to the freedom which are derived from Lange.

5. As explained in the reasons that follow, while the impugned provisions effectively burden the freedom, they have been enacted for legitimate purposes. They advance those purposes by rational means which not only do not impede the system of representative government provided for by the Constitution, but enhance it. There are no obvious and compelling alternative, reasonably practicable means of achieving the same purpose. The provisions are adequate in their balance. The burden imposed on the freedom is therefore justified as a proportionate means of achieving their purpose. The substantive questions stated in the special case should be answered in favour of the validity of the impugned provisions and the plaintiffs should pay the costs of the special case.

   The EFED Act

6. Provisions of the EFED Act were considered by this Court in Unions NSW v New South Wales[7].  That decision confirmed the operation of the freedom across State or Territory and federal divides and at all levels of government[8]. The submission that it did not apply to the EFED Act was rejected[9].

   [7](2013) 252 CLR 530.

   [8]Unions NSW v New South Wales (2013) 252 CLR 530 at 550 [25].

   [9]Unions NSW v New South Wales (2013) 252 CLR 530 at 553 [34], 582-583 [155].

7. The general purpose of Pt 6 of the EFED Act was not in dispute in that case. In the joint judgment[10] it was accepted that this purpose is to secure and promote the actual and perceived integrity of the Parliament and other institutions of government in New South Wales.  A risk to that integrity may arise from undue, corrupt or hidden influences over those institutions, their members or their processes.  That risk arises largely from the need, on the part of political parties and candidates, for large donations in order to compete effectively in election campaigns[11].

   [10]Unions NSW v New South Wales (2013) 252 CLR 530 at 545 [8], 557 [49], 558 [53].

   [11]Unions NSW v New South Wales (2013) 252 CLR 530 at 545‑546 [8], 557 [49], 558 [53].

8. Since the decision in Unions NSW, the EFED Act has been amended by the addition of an objects clause. Section 4A[12] provides:

   "The objects of this Act are as follows:

   (a)to establish a fair and transparent election funding, expenditure and disclosure scheme,

   (b)to facilitate public awareness of political donations,

   (c)to help prevent corruption and undue influence in the government of the State,

   (d)to provide for the effective administration of public funding of elections, recognising the importance of the appropriate use of public revenue for that purpose,

   (e)to promote compliance by parties, elected members, candidates, groups, agents, third-party campaigners and donors with the requirements of the election funding, expenditure and disclosure scheme."

   [12]Inserted by the Electoral and Lobbying Legislation Amendment (Electoral Commission) Act 2014 (NSW), Sched 2 [4].

9. Although the purpose of Pt 6 of the EFED Act was accepted as legitimate[13] in Unions NSW, in the sense referred to in Lange[14], the provisions of Pt 6 in question in Unions NSW[15] were held to be invalid because they could not be seen as rationally connected to that purpose.

   [13]Unions NSW v New South Wales (2013) 252 CLR 530 at 546 [9], 579 [138].

   [14](1997) 189 CLR 520 at 561-562.

   [15]Election Funding, Expenditure and Disclosures Act 1981 (NSW), ss 96D and 95G(6).

10. This case concerns Div 2A of Pt 6 ("Div 2A"), Div 4A of Pt 6 ("Div 4A") and s 96E, which also appears in Pt 6 of the EFED Act. Part 6 applies to State and local government elections and to elected members of Parliament and councils, except Div 2A, which applies only to State elections and elected members of Parliament[16].

    [16]Election Funding, Expenditure and Disclosures Act 1981, s 83.

11. Section 95A(1), in Div 2A, provides general caps on the amount of political donations which a person can make to or for the benefit of a particular political party, elected member, group, candidate or third-party campaigner. Political donations to a registered political party are limited to $5,000 in a financial year[17].  This cap (as well as the caps referable to the other categories of recipients) is subject to indexation[18].  For any cap, donations during a financial year are aggregated[19].  Subject to certain exceptions, it is unlawful for a person to accept a political donation which exceeds the applicable cap[20].

    [17]Election Funding, Expenditure and Disclosures Act 1981, s 95A(1)(a).

    [18]Election Funding, Expenditure and Disclosures Act 1981, s 95A(5), Sched 1, cl 2.

    [19]Election Funding, Expenditure and Disclosures Act 1981, ss 95A(2)-95A(3).

    [20]Election Funding, Expenditure and Disclosures Act 1981, s 95B(1).

12. A political donation is essentially a gift[21].  However, a gift made in a private capacity to an individual for his or her personal use, which is not used, and is not intended by the individual to be used, for a purpose related to an election or to his or her duties as an elected member, is not a political donation[22].  A candidate's contribution to finance his or her own campaign is not included in the applicable caps on political donations[23]. A subscription which is below a prescribed amount, paid to a political party by an industrial organisation, member, entity or other person, is disregarded for the purposes of Div 2A[24].

    [21]Election Funding, Expenditure and Disclosures Act 1981, s 85.

    [22]Election Funding, Expenditure and Disclosures Act 1981, s 85(4)(a).

    [23]Election Funding, Expenditure and Disclosures Act 1981, s 95A(4).

    [24]Election Funding, Expenditure and Disclosures Act 1981, s 95D(1).

13. Although not in issue in these proceedings, two other aspects of the scheme of the EFED Act should be mentioned. The provisions of Div 2A reduce the income available to candidates for election purposes. Division 2B of Pt 6 contains complementary provisions which cap "electoral communication expenditure". That term is defined[25] to include expenditure on advertisements and other matters associated with campaigning. The restriction on political donations is ameliorated, to some extent, by the provision made in Pt 5 for public funding of State election campaigns.

    [25]Election Funding, Expenditure and Disclosures Act 1981, s 87(2).

14. Section 96E(1) prohibits the "indirect campaign contributions" which are there listed. They include the provision of office accommodation, vehicles, computers or other equipment for no or inadequate consideration for use solely or substantially for election campaign purposes, and payment by someone else of electoral expenditure incurred or to be incurred by a party, elected member, group or candidate. Sub-section (2) of s 96E prohibits the acceptance of any of the listed indirect campaign contributions.

15. Section 96GA, in Div 4A, prohibits the making or acceptance, directly or indirectly, of a political donation by a "prohibited donor" or the soliciting of a person by or on behalf of a "prohibited donor" to make a political donation. "Prohibited donor" is defined by s 96GAA to mean:

    "(a)a property developer, or

    (b)a tobacco industry business entity, or

    (c)a liquor or gambling industry business entity,

    and includes any industry representative organisation if the majority of its members are such prohibited donors."

    The special case, as the plaintiffs acknowledge, is limited to the prohibition in Div 4A applying to property developers, not the other two classes of "prohibited donors". A "property developer" is defined in s 96GB(1) as:

    "(a)a corporation engaged in a business that regularly involves the making of relevant planning applications by or on behalf of the corporation in connection with the residential or commercial development of land, with the ultimate purpose of the sale or lease of the land for profit,

    (b)a person who is a close associate of a corporation referred to in paragraph (a)."

    The other two classes of prohibited donors are also, in part, defined as corporations and their close associates[26].

    [26]Election Funding, Expenditure and Disclosures Act 1981, ss 96GB(2A), 96GB(2B).

16. A "relevant planning application"[27] has the same meaning as in the Environmental Planning and Assessment Act 1979 (NSW) ("the EPA Act"), which covers a wide range of planning related applications under that Act[28].

    [27]Election Funding, Expenditure and Disclosures Act 1981, s 96GB(3).

    [28]Environmental Planning and Assessment Act 1979 (NSW), s 147.

17. A "close associate" of a corporation is defined[29] to include a director or officer of the corporation or the spouse (which includes a de facto partner) of that person; a related body corporate of the corporation; a person whose voting power in the corporation or related body corporate is more than 20 per cent, or their spouse; or, when a corporation is a trustee, manager or responsible entity in relation to a trust, a person who holds more than 20 per cent of the units in a unit trust or is a beneficiary of a discretionary trust.

    [29]Election Funding, Expenditure and Disclosures Act 1981, s 96GB(3).

18. The third plaintiff is a "property developer" within the meaning given to that term by the EFED Act. The first plaintiff is a director and "close associate" of the third plaintiff and therefore himself a "property developer" within the meaning of the EFED Act.

19. The first plaintiff made donations of money to candidates for the March 2011 New South Wales State election. The second plaintiff, a corporation of which the first plaintiff is a director, made an "indirect campaign contribution" within the meaning of the EFED Act by way of payment towards the remuneration of a member of the campaign staff of a candidate for that election. Each of the plaintiffs intends, if permitted by law, to make donations in excess of $5,000 to the New South Wales division of a particular political party or to other political parties.

20. The plaintiffs challenge the validity of Div 2A, Div 4A and s 96E. They submit that the ability to pay money to secure access to a politician is itself an aspect of the freedom and therefore the subject of constitutional protection. To the extent that the freedom may be abridged by laws which are proportionate to a legitimate end, one which is consistent with the system of representative government for which the Constitution provides[30], the plaintiffs submit that these provisions are not of that kind.

    [30]Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 561-562, 567.

    The questions in this case

21. The following questions are stated by the parties for the opinion of the Court:

    "1.Is Division 4A of Part 6 of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid (in whole or in part and, if in part, to what extent) in its application to the plaintiffs because it impermissibly burdens the implied freedom on communication on governmental and political matters contrary to the Commonwealth Constitution?

    2.Is Division 2A of Part 6 of Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid (in whole or in part and, if in part, to what extent) in its application to the plaintiffs because it impermissibly burdens the implied freedom of communication of governmental and political matters contrary to the Commonwealth Constitution?

    3.Is s 96E of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) invalid in its application to the plaintiffs because it impermissibly burdens the implied freedom of communication of governmental and political matters contrary to the Commonwealth Constitution?

    4.Who should pay the costs of the special case?"

22. Section 96E is merely an anti-avoidance provision. Its purpose is to prevent political donations being made to a monetary value larger than the applicable cap by indirect means. Its validity depends upon that of Div 2A.

    The effect on the freedom

23. The constitutional basis for the freedom is well settled.  The Court was not invited by any party to reconsider the basis for the implication.  Lange is the authoritative statement of the test to be applied to determine whether a law contravenes the freedom.  All parties accepted that the Lange test was to be applied in this case to determine whether the impugned provisions of the EFED Act are consistent with the freedom. The only question, then, is as to what is required by the Lange test. In that regard, whether the impugned provisions are consistent with the freedom is to be determined, not by a side by side comparison of the challenged provisions with the text of ss 7, 24, 64 and 128 of the Constitution, nor by a determination of whether the impugned provisions are reasonably necessary in the pursuit of a purpose adjudged to be sufficiently important, nor by an impressionistic judgment as to whether the impugned provisions are consistent with the freedom. The Lange test requires a more structured, and therefore more transparent, approach.  In the application of that approach it is necessary to elucidate how it is that the impugned law is reasonably appropriate and adapted, or proportionate, to the advancement of its legitimate purpose.

24. Central to the questions posed by Lange[31] is how the EFED Act affects the freedom. In Unions NSW, it was accepted by the parties, and by the Court, that the provisions of the EFED Act effect a burden on the freedom[32].  A restriction on the funds available to political parties and candidates to meet the costs of political communication, which operates by restricting the source of those funds, effectively burdens the freedom because, even with the public funding which is provided for, a party or candidate will have to fund any shortfall[33]. The restrictions imposed by the general capping provisions of Div 2A, and the prohibitions upon political donations from property developers in Div 4A and upon indirect campaign contributions in s 96E, burden the freedom in this sense. It is, then, incumbent upon New South Wales to justify that burden, by reference to the requirements drawn from Lange.

    [31](1997) 189 CLR 520 at 567, see also at 561-562; as those questions were amended by Coleman v Power (2004) 220 CLR 1 at 51 [95]‑[96], 78 [196], 82 [211].

    [32]Unions NSW v New South Wales (2013) 252 CLR 530 at 555 [43], 574 [120]-[121].

    [33]Unions NSW v New South Wales (2013) 252 CLR 530 at 554 [38].

25. The plaintiffs contend that the provisions in question have a further effect on the freedom, namely upon the ability of donors to make substantial political donations in order to gain access and make representations to politicians and political parties.  They accept, as they must, that the act of donation is not itself a political communication, but they submit that donors are entitled to "build and assert political power" and that this is an aspect of the freedom which has been recognised by this Court.  Political influence may be acquired by many means, they say, and paying money to a political party or an elected member is but one.

26. The words quoted by the plaintiffs and repeated above are taken from a passage in Archibald Cox's text[34], which was referred to by Mason CJ in Australian Capital Television Pty Ltd v The Commonwealth[35] ("ACTV") and by the joint judgment in Unions NSW[36]:

    "Only by uninhibited publication can the flow of information be secured and the people informed …  Only by freedom of speech … and of association can people build and assert political power".

    In Unions NSW[37] this passage was referred to in order to explain the need for an unfettered exchange of ideas.  It was said that persons other than electors have a legitimate interest in matters of government and may seek to influence who should govern.  This was in the context of a provision which purported to restrict donors to being individuals who are enrolled as electors.

    [34]Cox, The Court and the Constitution, (1987) at 212.

    [35](1992) 177 CLR 106 at 139; [1992] HCA 45.

    [36](2013) 252 CLR 530 at 551 [29].

    [37](2013) 252 CLR 530 at 551-552 [30].

27. In ACTV, Mason CJ[38] referred to the last sentence in the passage quoted as a "striking comment" on Professor Harrison Moore's statement[39] that "'[t]he great underlying principle' of the Constitution was that the rights of individuals were sufficiently secured by ensuring each an equal share in political power" (footnote omitted).

    [38]Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 139-140.

    [39]Harrison Moore, The Constitution of the Commonwealth of Australia, (1902) at 329; that statement as summarised by Mason CJ.

28. Neither the passage from Archibald Cox nor the use made of it by this Court supports the plaintiffs' argument that the ability to make substantial donations is part of the freedom.  To the contrary, guaranteeing the ability of a few to make large political donations in order to secure access to those in power would seem to be antithetical to the great underlying principle to which Professor Harrison Moore referred.

29. In any event, what the plaintiffs identify is something in the nature of a personal right. The plaintiffs' argument appears to mistakenly equate the freedom under our Constitution with an individual right such as is conferred by the First Amendment to the United States Constitution, which operates in the field of political donations and is in the nature of both a right of political expression and a right of political association[40].

    [40]Buckley v Valeo 424 US 1 at 21-22 (1976).

30. It has repeatedly been explained, most recently in Unions NSW[41], that the freedom is not a personal right.  In ACTV[42], Brennan J said that "the freedom cannot be understood as a personal right the scope of which must be ascertained in order to discover what is left for legislative regulation". The freedom is best understood as a constitutional restriction on legislative power and the question is more generally as to the effect that the impugned legislation has upon the freedom. The EFED Act is not to be approached by viewing the restrictions it imposes upon the plaintiffs' ability to access politicians as a burden on the freedom. The relevant burden is that identified in Unions NSW.

    [41](2013) 252 CLR 530 at 551 [30], 554 [36].

    [42](1992) 177 CLR 106 at 150.

    Compatibility of the legitimate purpose and means with the Constitution?

31. Accepting that Div 2A and Div 4A burden the freedom, in the way explained in Unions NSW, the process of justification for which Lange provides commences with the identification of the statutory purpose or purposes.  The other questions posed by Lange are not reached unless the purpose of the provisions in question is legitimate. A legitimate purpose is one which is compatible with the system of representative government provided for by the Constitution[43]; which is to say that the purpose does not impede the functioning of that system and all that it entails.  So too must the means chosen to achieve the statutory object be compatible with that system[44].

    [43]Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 561-562, 567.

    [44]Coleman v Power (2004) 220 CLR 1 at 50-51 [92]-[96], 78 [196], 82 [211].

    Div 2A and s 96E

32. The plaintiffs' argument in support of their submission that the effect of Pt 6 of the EFED Act shows that its true legislative purpose is other than that described in s 4A of the EFED Act does not identify any matter which detracts from the view expressed in Unions NSW[45]. It may be accepted that the words "corruption" and "undue influence" did not appear in the legislation until after that decision but, in relevant aspects, s 4A simply reflects the opinion stated in Unions NSW as to the general purpose of the EFED Act. The fact that the words are not repeated in Div 2A or other parts of the EFED Act does not detract from that purpose.

    [45](2013) 252 CLR 530 at 545‑546 [8].

33. The provisions of Div 2A are most clearly directed to the object stated in s 4A(c), the prevention of "corruption and undue influence in the government of the State". The capping provisions of Div 2A are intended to reduce the risk of corruption by preventing payments of large sums of money by way of political donation. It may be accepted, as the plaintiffs submit, that the EFED Act targets money which may be used for political communication, but this is not inconsistent with a purpose to prevent corruption.

34. The provisions of Div 2A, and those of the EFED Act more generally, may additionally have an ancillary purpose. They are also directed to overcoming perceptions of corruption and undue influence, which may undermine public confidence in government and in the electoral system itself. In a report of the Parliament of New South Wales Joint Standing Committee on Electoral Matters, which made recommendations as to capping[46], the Committee noted the submission that the purchase of access to politicians through large donations, which is not available to ordinary citizens, can result in "actual or the perception of undue influence"[47] and said that "the need for reform to restore public confidence in the integrity of the system was recognised by most of the political parties that are currently represented in the New South Wales Parliament"[48].

    [46]New South Wales, Parliament, Joint Standing Committee on Electoral Matters, Public Funding of Election Campaigns, Report No 2/54, (2010) at 3-5.

    [47]New South Wales, Parliament, Joint Standing Committee on Electoral Matters, Public Funding of Election Campaigns, Report No 2/54, (2010) at 90 [5.34], summarising the submission of the Public Interest Advocacy Centre.

    [48]New South Wales, Parliament, Joint Standing Committee on Electoral Matters, Public Funding of Election Campaigns, Report No 2/54, (2010) at 90 [5.33].

35. The plaintiffs submit that gaining access through political donations to exert persuasion is not undue influence.  This mirrors what was said by Kennedy J, writing the opinion of the Court in Citizens United v Federal Election Commission[49], that "[i]ngratiation and access … are not corruption."  In practice, however, the line between them and corruption may not be so bright.

    [49]558 US 310 at 360 (2010).

36. There are different kinds of corruption.  A candidate for office may be tempted to bargain with a wealthy donor to exercise his or her power in office for the benefit of the donor in return for financial assistance with the election campaign.  This kind of corruption has been described as "quid pro quo" corruption[50].  Another, more subtle, kind of corruption concerns "the danger that officeholders will decide issues not on the merits or the desires of their constituencies, but according to the wishes of those who have made large financial contributions valued by the officeholder."[51]  This kind of corruption is described as "clientelism".  It arises from an office‑holder's dependence on the financial support of a wealthy patron to a degree that is apt to compromise the expectation, fundamental to representative democracy, that public power will be exercised in the public interest.  The particular concern is that reliance by political candidates on private patronage may, over time, become so necessary as to sap the vitality, as well as the integrity, of the political branches of government.

    [50]Buckley v Valeo 424 US 1 at 26-27 (1976); McCutcheon v Federal Election Commission 188 L Ed 2d 468 at 485, 495-498 (2014).

    [51]McConnell v Federal Election Commission 540 US 93 at 153 (2003).

37. It has been said of the nature of the risk of clientelism that[52]:

    "unlike straight cash-for-votes transactions, such corruption is neither easily detected nor practical to criminalize.  The best means of prevention is to identify and to remove the temptation."

    [52]McConnell v Federal Election Commission 540 US 93 at 153 (2003).

38. Quid pro quo and clientelistic corruption threaten the quality and integrity of governmental decision-making, but the power of money may also pose a threat to the electoral process itself.  This phenomenon has been referred to as "war-chest" corruption[53].  This form of corruption has been identified, albeit using different terminology, as a matter of concern both in Australia[54] and in other liberal democracies of the common law tradition.

    [53]Federal Election Commission v Beaumont 539 US 146 at 154-155 (2003).

    [54]Discussed in Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 144-145, 154-155, 188-189.

39. In R (Animal Defenders International) v Secretary of State for Culture, Media and Sport[55], Lord Bingham of Cornhill said that in a democracy it is highly desirable that the playing field of public debate be so far as practicable level and that:

    "This is achieved where, in public discussion, differing views are expressed, contradicted, answered and debated.  …  It is not achieved if political parties can, in proportion to their resources, buy unlimited opportunities to advertise in the most effective media, so that elections become little more than an auction."

    [55][2008] AC 1312 at 1346 [28].

40. The plaintiffs' submission, that the relevant provisions of the EFED Act have as their true purpose the removal of the ability of persons to make large donations in the pursuit of political influence, would appear to confuse the effect of Div 2A, and other measures employed, with the overall purpose of these provisions.  In so far as the submission also seeks to make the legitimacy of legislative purpose contingent upon consistency with a personal right to make political donations as an exercise of free speech, it appears once again to draw on First Amendment jurisprudence.

41. In Austin v Michigan Chamber of Commerce[56], the prospect that the power of money concentrated in corporate hands could distort the electoral process, by dominating the flow of political communication, was identified by the Supreme Court of the United States as a threat to the democratic political process sufficient to justify restrictions on political campaign contributions.  However, this First Amendment jurisprudence has not been maintained.  More recently, it has been held that the United States Congress may impose restrictions on campaign contributions only to target quid pro quo corruption and the appearance of such corruption[57].  The decision in Austin is now regarded as inconsistent with the primacy awarded by the First Amendment to an individual's right to free speech and has been overruled[58].  The view that now prevails is that an attempt by the legislature to level the playing field to ensure that all voices may be heard is, prima facie, illegitimate.

    [56]494 US 652 at 660 (1990).

    [57]McCutcheon v Federal Election Commission 188 L Ed 2d 468 at 494-495 (2014).

    [58]Citizens United v Federal Election Commission 558 US 310 at 365, 469 (2010).

42. That is not the case with respect to the Australian Constitution.  As this Court said in Lange[59], ss 7, 24, 64 and 128 of the Constitution, and related provisions, necessarily imply a limitation on legislative and executive power in order to ensure that the people of the Commonwealth may "exercise a free and informed choice as electors." Sections 7 and 24 contemplate legislative action to implement the enfranchisement of electors, to establish an electoral system for the ascertainment of the electors' choice of representatives[60] and to regulate the conduct of elections "to secure freedom of choice to the electors."[61]  Legislative regulation of the electoral process directed to the protection of the integrity of the process is, therefore, prima facie, legitimate.

    [59](1997) 189 CLR 520 at 560.

    [60]Attorney-General (Cth); Ex rel McKinlay v The Commonwealth (1975) 135 CLR 1 at 56; [1975] HCA 53; McGinty v Western Australia (1996) 186 CLR 140 at 182; [1996] HCA 48.

    [61]Smith v Oldham (1912) 15 CLR 355 at 358; [1912] HCA 61.

43. In ACTV it was accepted that the fact that a legislative measure is directed to ensuring that one voice does not drown out others does not mean that measure is illegitimate for that reason alone[62].  The legitimacy of the concerns that the electoral process be protected from the corrupting influence of money and to place "all in the community on an equal footing so far as the use of the public airwaves is concerned" was accepted[63].  The legislation struck down in that case did not give equality of access to television and radio to all candidates and parties.  The constitutional vice identified by Mason CJ was that the regulatory regime severely restricted freedom of speech by favouring the established political parties and their candidates.  It also excluded from the electoral process action groups who wished to present their views to the community without putting forward candidates[64].

    [62]Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 144-145, 159, 175, 188-191, 239.

    [63]Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 130, see also at 161, 175, 189, 239.

    [64]Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 132, 145-146; see also at 171-173 per Deane and Toohey JJ, 220-221 per Gaudron J, 236‑237, 239 per McHugh J.

44. In Harper v Canada (Attorney General)[65] the Supreme Court of Canada upheld legislative restrictions on electoral advertising.  Bastarache J, delivering the opinion of the majority of the Court, explained[66] that the restrictions were legitimately imposed in accordance with "the egalitarian model of elections adopted by Parliament as an essential component of our democratic society."  His Honour continued that the premise for the model is equal opportunity for participation, and wealth is the major obstacle to equal participation.  His Honour said that the state can equalise participation in the electoral process in two ways:

    "First, the State can provide a voice to those who might otherwise not be heard.  …  Second, the State can restrict the voices which dominate the political discourse so that others may be heard as well."

    Speaking of the provisions in question as seeking to create a "level playing field for those who wish to engage in the electoral discourse", his Honour observed that, in turn, this "enables voters to be better informed; no one voice is overwhelmed by another."

    [65][2004] 1 SCR 827.

    [66]Harper v Canada (Attorney General) [2004] 1 SCR 827 at 868 [62].

45. Equality of opportunity to participate in the exercise of political sovereignty is an aspect of the representative democracy guaranteed by our Constitution[67].  In ACTV, the law which was struck down was inimical to equal participation by all the people in the political process and this was fatal to its validity.  The risk to equal participation posed by the uncontrolled use of wealth may warrant legislative action to ensure, or even enhance, the practical enjoyment of popular sovereignty[68].

    [67]Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 72; [1992] HCA 46; Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 136; Unions NSW v New South Wales (2013) 252 CLR 530 at 578 [135]-[136]; Tajjour v New South Wales (2014) 88 ALJR 860 at 901 [197]; 313 ALR 221 at 271; [2014] HCA 35.

    [68]See Coleman v Power (2004) 220 CLR 1 at 52 [97].

46. The risks that large political donations have for a system of representative government have been acknowledged since Federation.  Part XIV of the Commonwealth Electoral Act 1902 (Cth) contained certain limits on expenditure in electoral campaigns and would appear to have been based upon the Corrupt and Illegal Practices Prevention Act 1883 (UK)[69].  Speaking of that latter Act, J Renwick Seager[70] said:

    "if its provisions are honestly carried out, the length of a man's purse will not, as now, be such an important factor; and the way will be opened for many men of talent, with small means, to take part in the government of the country".

    Capping of political donations is a measure which has been adopted by many countries with systems of representative government[71]. It is a means that does not impede the system of representative government for which our Constitution provides.

    [69]46 & 47 Vict c 51.

    [70]Seager, The Corrupt Practices Act, 1883, with Introduction and Full Index, (1883) at 3.

    [71]Transparency International,  Money, Politics, Power:  Corruption Risks in Europe, (2012) at 54 identifies 13 European countries which have done so.

47. The purpose of Div 2A and the means employed to achieve that purpose are not only compatible with the system of representative government; they preserve and enhance it.

    Div 4A

48. The plaintiffs submit that the prohibitions in Div 4A cannot be based upon any rational perceived risk that property developers are more likely to make corrupt payments than others. Whilst they accept that the commercial interests of property developers are affected by the exercise of public power, they argue that the same may be said of any number of persons in the community. There is nothing special about property developers.

49. New South Wales submits that the degree of dependence of property developers on decisions of government about matters such as the zoning of land and development approvals distinguishes them from actors in other sectors of the economy.  Property developers are sufficiently distinct to warrant specific regulation in light of the nature of their business activities and the nature of the public powers which they might seek to influence in their self-interest, as history in New South Wales shows.

50. These submissions of New South Wales should be accepted. Recent history in New South Wales tells against the plaintiffs' submission. The plaintiffs may be correct to say that there is no other legislation in Australia or overseas which contains a prohibition of the kind found in Div 4A, but a problem has been identified in New South Wales and Div 4A is one means to address it.

51. The Independent Commission Against Corruption ("ICAC") and other bodies have published eight adverse reports since 1990 concerning land development applications.  Given the difficulties associated with uncovering and prosecuting corruption of this kind, the production of eight adverse reports in this time brings to light the reality of the risk of corruption and the loss of public confidence which accompanies the exposure of acts of corruption.  In ICAC's Report on Investigation into North Coast Land Development[72], the report author, Mr Roden QC, said that:

    "A lot of money can depend on the success or failure of a lobbyist's representations to Government.  Grant or refusal of a rezoning application, acceptance or rejection of a tender, even delay in processing an application that must eventually succeed, can make or break a developer.  And decisions on the really mammoth projects can create fortunes for those who succeed.  The temptation to offer inducements must be considerable."

    [72]New South Wales, Independent Commission Against Corruption, Report on Investigation into North Coast Land Development, (1990) at 652-653.

52. True it is that the eight reports relate to applications processed at a local level and that local councils consider most development applications. However, decisions as to land development are also made by relevant State departments, and Ministers are often consulted in the approval process. Pursuant to the EPA Act[73], the Minister determines applications for State significant development.  It is the Minister who is responsible for making local environmental plans[74], which contain zoning and development controls[75].  State environmental planning policies are made by the Governor on the recommendation of the Minister and they may make provision for any matter that, in the Minister's opinion, is of State or regional environmental planning significance[76].

    [73]Environmental Planning and Assessment Act 1979, ss 89D-89E.

    [74]Environmental Planning and Assessment Act 1979, Pt 3, Div 4.

    [75]Environmental Planning and Assessment Act 1979, s 26.

    [76]Environmental Planning and Assessment Act 1979, s 37.

53. The purpose of Div 4A is to reduce the risk of undue or corrupt influence in an area relating to planning decisions, where such risk may be greater than in other areas of official decision-making. This purpose furthers the general purpose of Pt 6 of the EFED Act and is "legitimate" within the meaning given to that term in Lange, as are the means adopted to achieve it.

    No rational connection to purpose?

54. The plaintiffs submit that Div 2A and Div 4A have no rational connection to the purpose of targeting corruption. In the language of proportionality analysis, discussed later in these reasons, that is a submission that the impugned provisions are not "suitable". By analogy with the reasons of the joint judgment in Unions NSW, the plaintiffs submit that it is not explained why Div 4A targets only corporations and their close associates who are property developers and not individuals or firms. Other deficiencies are pointed to in Div 2A such as a failure to distinguish between corrupt political donations and those made without a corrupting purpose, and a failure to capture personal gifts.

55. These factors bear no similarity to the problem associated with the provisions at issue in Unions NSW. In that case, s 96D(1) prohibited the acceptance of a political donation unless it was from a person enrolled as an elector. Section 95G(6) effectively aggregated the amount spent by way of electoral communication expenditure by a political party and its affiliated organisations for the purposes of the capping provisions in Div 2A. Unlike other provisions in Pt 6, it was not possible to discern how these provisions could further the general anti-corruption purpose of the EFED Act.

56. The provisions of Div 2A and Div 4A do not suffer from such a problem. New South Wales submits that it may be expected that most commercial land developments will be undertaken by corporations, but it does not matter whether that was the reason for excluding other entities and persons from the operation of Div 4A. If there is a deficiency of the kind contended for by the plaintiffs, it is not one which severs the connection to the anti-corruption purpose of the EFED Act. The same may be said of the other alleged deficiencies in Div 2A.

    An equally practicable alternative? – necessity

57. In Lange[77] it was observed that the law in question in ACTV was held to be invalid because there were other, less drastic, means by which the objects of the law could have been achieved.  In Unions NSW[78] it was said that the Lange test may involve consideration of whether there are alternative, reasonably practicable means of achieving the same purpose which have a less restrictive effect on the freedom. If there are other equally appropriate means, it cannot be said that the selection of the one which is more restrictive of the freedom is necessary to achieve the legislative purpose. This method of testing mirrors, to an extent, that which has been applied with respect to legislation which restricts the freedom guaranteed by s 92 of the Constitution.

    [77](1997) 189 CLR 520 at 568.

    [78](2013) 252 CLR 530 at 556 [44].

58. In Monis v The Queen[79] it was said that any alternative means must be "obvious and compelling", a qualification which, as French CJ pointed out in Tajjour v New South Wales[80], ensures that the consideration of alternative means is merely a tool of analysis in applying this criterion of proportionality.  Courts must not exceed their constitutional competence by substituting their own legislative judgments for those of parliaments.

    [79](2013) 249 CLR 92 at 214 [347]; [2013] HCA 4.

    [80](2014) 88 ALJR 860 at 876 [36]; 313 ALR 221 at 238.

59. The plaintiffs put forward two alternatives to the measures in Div 2A. They say that it would be less restrictive of the freedom if the prohibition on receiving political donations in excess of the applicable caps were confined to those donations which are intended as corrupting; which is to say to limit it to occasions of bribery. They also say that the best method of targeting corruption is transparency and that the requirements in the EFED Act for disclosure of donations could be strengthened.

60. Division 2 of Pt 6 of the EFED Act contains provisions requiring the disclosure to the Electoral Commission[81] of political donations made or received during a relevant disclosure period and of electoral expenditure[82].  The Commission publishes reportable donations and electoral expenditure on its website[83].

    [81]Election Funding, Expenditure and Disclosures Act 1981, s 91(2); formerly, disclosures had to be to the Election Funding Authority of New South Wales.

    [82]Election Funding, Expenditure and Disclosures Act 1981, ss 88, 92, 93.

    [83]Election Funding, Expenditure and Disclosures Act 1981, s 95(1).

61. The plaintiffs do not explain how these provisions might be strengthened in a way which would render the capping provisions unnecessary. Whilst provisions requiring disclosure of donations are no doubt important, they could not be said to be as effective as capping donations in achieving the anti-corruption purpose of the EFED Act.

62. Limiting restrictions on political donations to acts of bribery would undoubtedly reduce the efficacy of the statutory scheme.  The difficulties inherent in detecting and proving bribery in the context of political donations do not suggest that it can be considered a reasonable alternative to capping.  Further, it is not the subjective intention of the donor so much as the objective tendency of large payments of money to corrupt both government and the electoral system which is the justification for the restriction.

63. In the course of argument there was some discussion about whether, given the provision made for capping in Div 2A, the outright prohibition of some donors in Div 4A could be said to be necessary. However, the matter is complicated by the fact that capping and the associated public funding for election campaign purposes are not extended to local government elections, whereas the prohibition in Div 4A is. It was not suggested that the legislature should allocate resources to extend the capping and public funding provisions in order to give them the same scope as the prohibition, nor was it suggested that a partial removal of the prohibition, for local government elections, would be practicable. The plaintiffs did not pursue such a line of argument, eschewing capping altogether for being unnecessary.

    Other submissions as to proportionality

64. The plaintiffs submit that Div 2A, and s 95B in particular, does not go far enough and does not achieve its object comprehensively because it does not capture all dealings between a donor and donee. Whether or not this identifies a shortcoming of the provisions, the submission does not identify a want of proportionality.

65. Turning to the object of Div 2A, the plaintiffs say that it goes further than is necessary to target actual corruption and pursues a "wider cosmetic objective" of targeting a "perceived lack of integrity". It is difficult to accept that the public perception of possible corruption in New South Wales is a "cosmetic" concern. Even First Amendment jurisprudence accepts that the "appearance" of corruption in politics is a legitimate target of legislative action[84].  The submission is also at odds with the plaintiffs' concession that the maintenance of public confidence is a public benefit which can be relied upon as a justification for a legislative restriction on the freedom.

    [84]Buckley v Valeo 424 US 1 at 27-28 (1976).

    Justification:  compatibility and proportionality testing

66. The plaintiffs' submissions as to proportionality proceed on a correct basis, that proportionality analysis of some kind is part of the Lange test.  However, those submissions, and others which have been put to the Court, tend to treat the question of proportionality as one at large and involving matters of impression, such as whether the legislative measures go too far, or not far enough.  Something more should be said about the reason why it is necessary to enquire into the proportionality of a legislative measure which restricts the freedom.  This requires examination of the nature of the proportionality enquiries which Lange renders necessary, their limits and their relationship with the Lange test of compatibility.

67. The process of justification called for by Lange commences with the requirement that the purpose of the provisions in question, which is to be identified by a process of construction, must be compatible with the system of representative government for which the Constitution provides. Other legal systems which employ proportionality testing to determine the limits of legislative power to restrict a right or freedom also require, before that testing commences, that there be a legitimate purpose, because only a legitimate purpose can justify a restriction[85].  But what is there spoken of as legitimate is that the purpose is one permitted by the relevant constitution.  The test in Lange requires more, both as to what qualifies as legitimate, and as to what must meet this qualification.  It requires, at the outset, that consideration be given to the purpose of the legislative provisions and the means adopted to achieve that purpose in order to determine whether the provisions are directed to, or operate to, impinge upon the functionality of the system of representative government.  If this is so, no further enquiry is necessary.  The result will be constitutional invalidity.

    [85]Grimm, "Proportionality in Canadian and German Constitutional Jurisprudence", (2007) 57 University of Toronto Law Journal 383 at 387-388; Lübbe-Wolff, "The Principle of Proportionality in the Case-Law of the German Federal Constitutional Court", (2014) 34 Human Rights Law Journal 12 at 13-14.

68. Otherwise, if this first test, of compatibility, is met, attention is then directed to the effect of the provisions on the freedom itself. It is at this point that proportionality testing is applied. The reason it is required is that any restriction of the freedom must be justified, given that the freedom is protective of the constitutionally mandated system of representative government. It is not sufficient for validity that the legislative provisions in question are compatible with the system of representative government, for if the protective effect of the freedom is impaired the system will likely suffer. Therefore, it is also necessary that any burden on the freedom also be justified, and the answer to whether this is so is found by proportionality testing. The difference between the test of compatibility and proportionality testing is that the latter is a tool of analysis for ascertaining the rationality and reasonableness of the legislative restriction, while the former is a rule derived from the Constitution itself.

    Proportionality testing in relation to the freedom

69. A legislative measure will not be invalid for the reason only that it burdens the freedom.  It has been pointed out on many occasions that the freedom is not absolute[86].  On the other hand, legislative incursions upon the freedom are not to be simply accepted without more.  It was said by members of the Court in Nationwide News Pty Ltd v Wills[87] and in ACTV[88] that what is called for is a justification for a burden on the freedom.  Similar statements were made in cases which followed, both before[89] and after[90] Lange.  Until Lange, questions remained about how a legislative restriction of the freedom, and that restriction's means, could be said to be justified.  Since Lange, the focus has been upon what is involved in the conditions the Lange test states for validity.

    [86]Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 76-77, 94-95; Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 142, 159, 169, 217‑218; Cunliffe v The Commonwealth (1994) 182 CLR 272 at 299, 336-337, 363, 387; [1994] HCA 44; Monis v The Queen (2013) 249 CLR 92 at 141 [103], 190 [267], 207 [324].

    [87](1992) 177 CLR 1 at 76-77, 78 per Deane and Toohey JJ.

    [88](1992) 177 CLR 106 at 143, 146, 147 per Mason CJ, 169, 171, 175 per Deane and Toohey JJ, 233, 234, 238 per McHugh J.

    [89]Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 at 178-179, 183-184 per Deane J; [1994] HCA 46; Cunliffe v The Commonwealth (1994) 182 CLR 272 at 299, 300, 301, 304, 306 per Mason CJ, 339-340, 341-346 per Deane J.

    [90]Levy v Victoria (1997) 189 CLR 579 at 647; [1997] HCA 31; Kruger v The Commonwealth (1997) 190 CLR 1 at 92-93, 128, 129; [1997] HCA 27; Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at 284 [205]; [2001] HCA 63; Coleman v Power (2004) 220 CLR 1 at 43 [76], 53-54 [102]-[103], 123 [326]; Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at 200 [40], 201 [41], 279 [292]; [2004] HCA 41; APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 at 404 [222]; [2005] HCA 44; Wotton v Queensland (2012) 246 CLR 1 at 22 [52], 34 [90]; [2012] HCA 2; Monis v The Queen (2013) 249 CLR 92 at 129 [62], 146 [124], 148 [126], 191 [271], 193-194 [280], 213 [343]; Unions NSW v New South Wales (2013) 252 CLR 530 at 555 [39], 557 [50]-[51], 560 [60], 561 [65], 586 [166]; Tajjour v New South Wales (2014) 88 ALJR 860 at 892-893 [145], 893-894 [149]-[152], 895-896 [160]-[167]; 313 ALR 221 at 259-260, 260-262, 263-264.

70. In the present case, the Commonwealth submitted that the second question in the Lange test is directed to the "sufficiency of the justification", but did not say how such a conclusion is reached, or is not reached.  It is true that in some judgments in ACTV[91], and in cases which followed[92], it was said that a "compelling justification" may be required, but this is to say no more than that a more convincing justification will be required when the restrictive effect of legislation on the freedom is direct and substantial.  It does not explain how the legislation may be justified.  However, Lange, in addition to noting the other requirements arising from the Constitution, pointed clearly in the direction of proportionality analysis.

    [91](1992) 177 CLR 106 at 143, 147, 233, 234-235, 236, 238.

    [92]Cunliffe v The Commonwealth (1994) 182 CLR 272 at 299; Levy v Victoria (1997) 189 CLR 579 at 647; Mulholland v Australian Electoral Commission (2004) 220 CLR 181 at 200 [40], 201 [41]; Tajjour v New South Wales (2014) 88 ALJR 860 at 896 [164]; 313 ALR 221 at 264.

71. Lange is a judgment of the whole Court.  Its terms may be expected to reflect some compromise reached.  It is not to be expected that, in its reference to a legislative measure being "reasonably appropriate and adapted" to achieve a legitimate end, which the Court equated with "proportionality"[93], it was providing a complete statement of what is involved in that enquiry.  Lange did identify as relevant in ACTV the availability of alternative measures, as mentioned earlier in these reasons.  It identified as relevant the relationship between the legitimate end and the means by which this is achieved[94].  It identified as relevant the extent of the effect the legislative measure has on the freedom, when it expressed concern that the burden not be "undue"[95].  In so doing, it identified elements of proportionality testing.

    [93]Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 562, 567 n 272.

    [94]Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 568. This is now part of the Lange test following Coleman v Power (2004) 220 CLR 1 at 50-51 [92]-[96], 78 [196], 82 [211].

    [95]Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 569, 575.

72. Much has been written since Lange and Coleman v Power on the topic of proportionality analysis, including, perhaps most influentially, by Professor Aharon Barak.  In the period since those decisions the use of proportionality in other jurisdictions, to test the justification of a restriction on a constitutional right or freedom, has gained greater acceptance.  Nevertheless, it is not to be expected that each jurisdiction will approach and apply proportionality in the same way, but rather by reference to its constitutional setting and its historical and institutional background.  This reinforces the characterisation of proportionality as an analytical tool rather than as a doctrine.  It also explains why no decision of this Court has imported into Australian jurisprudence the scrutiny of compelling government interests applied in United States constitutional jurisprudence.  More importantly, since Lange and Coleman v Power, considerable attention has been given in judgments in this Court to what the test in Lange requires.  A majority of the Court in Unions NSW identified as relevant to, if not inhering in, the test, the first two tests of proportionality.  The submissions in this case now direct attention to the relevance of purpose in connection with the extent to which the freedom is burdened.

73. The freedom which is implied from provisions of the Australian Constitution is not a right, of the kind to which proportionality testing is applied by courts in other constitutional systems.  Nevertheless, such testing has evident utility as a tool for determining the reasonableness of legislation which restricts the freedom and for resolving conflicts between the freedom and the attainment of legislative purpose.

74. Proportionality provides a uniform analytical framework for evaluating legislation which effects a restriction on a right or freedom.  It is not suggested that it is the only criterion by which legislation that restricts a freedom can be tested.  It has the advantage of transparency.  Its structured nature assists members of the legislature, those advising the legislature, and those drafting legislative materials, to understand how the sufficiency of the justification for a legislative restriction on a freedom will be tested.  Professor Barak suggests that "members of the legislative branch want to know, should know, and are entitled to know, the limits of their legislative powers."[96]

    [96]Barak, Proportionality:  Constitutional Rights and their Limitations, (2012) at 379.

75. So far as concerns the courts, the question whether a legislative measure which restricts the freedom can be said to be justified is not to be approached as a matter of impression.  It should not be pronounced as a conclusion, absent reasoning.  It is not to be inferred that, in stating the test in Lange, it was intended that the test was to be answered by reference to a value judgment as to what is reasonable, made without reference to any generally applicable criteria.

76. To the contrary, as earlier explained, Lange identifies the structure for and, to an extent, the content of proportionality testing.  Accepting that value judgments cannot be avoided altogether, their subjectivity is lessened and a more objective analysis encouraged by this process.  In so far as proportionality may be considered to involve a conclusion that a statutory limitation is or is not reasonably necessary, the means of testing for this conclusion have already been identified in the test of reasonable necessity, as Unions NSW confirms.  It cannot then be said that another, more open ended, enquiry is also required.  Something more, and different, must be required.

77. In an article by a former member of the Federal Constitutional Court of Germany[97], referred to by Lord Mance JSC in Pham v Secretary of State for the Home Department (Open Society Justice Initiative intervening)[98], it was said that proportionality testing may be seen:

    "as a tool directing attention to different aspects of what is implied in any rational assessment of the reasonableness of a restriction.  …  [It] is designed to … help control intuitive assessments, [and] make value judgments explicit.  Whether it is also used as a tool to intensify judicial control of state acts is not determined by the structure of the test but by the degree of judicial restraint practised".

    In a system operating according to a separation of powers, judicial restraint should be understood to require no more than that the courts undertake their role without intruding into that of the legislature.

    [97]Lübbe-Wolff, "The Principle of Proportionality in the Case-Law of the German Federal Constitutional Court", (2014) 34 Human Rights Law Journal 12 at 16 (emphasis in original).

    [98][2015] 1 WLR 1591 at 1622 [96]; [2015] 3 All ER 1015 at 1044.

78. In Bank Mellat v HM Treasury (No 2)[99], Lord Reed JSC observed that, in the domestic courts of the United Kingdom, a more clearly structured approach to proportionality analysis was necessary than that taken by the European Court of Human Rights because the former accords with the analytical approach to legal reasoning which is characteristic of the common law.  Its attraction as a heuristic tool, his Lordship explained, "is that, by breaking down an assessment of proportionality into distinct elements, it can clarify different aspects of such an assessment, and make value judgments more explicit."

    [99][2014] AC 700 at 790 [72]-[74].

79. It is generally accepted that there are at least three stages to a test of proportionality[100].  As stated in the introduction to these reasons, they are whether the statute is suitable, necessary, and adequate in its balance.

    [100]The Supreme Courts of the United Kingdom and Canada divide the same concepts into four:  see Bank Mellat v HM Treasury (No 2) [2014] AC 700 at 771 [20], 790-791 [74], 805 [132], 814 [166]; R v Oakes [1986] 1 SCR 103 at 138-139.

80. Suitability is also referred to as "appropriateness" or "fit"[101].  Despite this language, it does not involve a value judgment about whether the legislature could have approached the matter in a different way.  If the measure cannot contribute to the realisation of the statute's legitimate purpose, its use cannot be said to be reasonable.  This stage of the test requires that there be a rational connection between the provision in question and the statute's legitimate purpose, such that the statute's purpose can be furthered.  This was the approach followed in Unions NSW[102].  It is an enquiry which logic requires.

    [101]Barak, Proportionality:  Constitutional Rights and their Limitations, (2012) at 303.

    [102](2013) 252 CLR 530 at 557-558 [50]-[55], 561 [64], 579 [140], 586 [168].

81. The second stage of the test – necessity – generally accords with the enquiry identified in Unions NSW[103] as to the availability of other, equally effective, means of achieving the legislative object which have a less restrictive effect on the freedom and which are obvious and compelling.  If such measures are available, the use of more restrictive measures is not reasonable and cannot be justified.

    [103](2013) 252 CLR 530 at 556 [44].

82. It is important to recognise that the question of necessity does not deny that it is the role of the legislature to select the means by which a legitimate statutory purpose may be achieved.  It is the role of the Court to ensure that the freedom is not burdened when it need not be.  Once within the domain of selections which fulfil the legislative purpose with the least harm to the freedom, the decision to select the preferred means is the legislature's[104].

    [104]Barak, Proportionality:  Constitutional Rights and their Limitations, (2012) at 409.

83. The first two stages of the test for the proportionality, or reasonableness, of a legislative measure concern the relationship between the legitimate legislative purpose ("ends") and the means employed to achieve it ("means").  Neither the importance of the legislative purpose nor the extent of the effect on the freedom are examined at these stages.  The Lange test identifies the extent of the effect on the freedom as relevant[105], but does not say what, if anything, is to be balanced against the effect on the freedom in order to determine whether the measure is justified.  The Lange test does not expressly identify assessment of the importance of the legislative purpose as a relevant factor.

    [105]Coleman v Power (2004) 220 CLR 1 at 50 [92].

84. It is not possible to ignore the importance of a legislative purpose in considering the reasonableness of a legislative measure because that purpose may be the most important factor in justifying the effect that the measure has on the freedom.  The submissions for the Commonwealth bear this out.  The Commonwealth submitted that the Court cannot consider the relationship between the means adopted by the law and "the constitutional imperative" to not infringe the freedom without having the object of the law in view, for some statutory objects may justify very large incursions on the freedom.  The example the Commonwealth gave was the object of protecting security of the nation at a time of war.

85. If, by "the constitutional imperative", it is meant the maintenance of the system of representative government, the submission may blur the distinction between the first Lange requirement, of compatibility with that system, and the second test, for proportionality of the effects on the freedom.  Nevertheless, this submission correctly directs attention to the legislative purpose as a key element of a justification. 

86. The last stage of the Lange test did not mandate an enquiry limited to the extent of the burden on the freedom.  The question whether a statutory effect on the freedom is "undue" or "impermissibly burdens" the freedom must, logically, bring into consideration the statutory purpose.  To leave it out of consideration is to deny the most important aspect of justification from the perspective of the legislature.  The cases before and after Lange speak in terms of legislative justification as earlier mentioned[106].  The enquiry must be whether the burden is undue, not only by reference to the extent of the effect on the freedom, but also having regard to the public importance of the purpose sought to be achieved.  This is the balance which necessarily, and logically, inheres in the Lange test.

    [106]See [69] above.

87. The purpose of and benefit sought to be achieved by legislative provisions assume relevance in the third stage of the test for proportionality.  This stage, that of strict proportionality or balancing, is regarded by the courts of some legal systems as most important.  It compares the positive effect of realising the law's proper purpose with the negative effect of the limits on constitutional rights or freedoms.  It requires an "adequate congruence between the benefits gained by the law's policy and the harm it may cause"[107], which is to say, a balance.  Balancing is required because it is rare that the exercise of a right or freedom will be prohibited altogether.  Only aspects of it will be restricted, so what is needed, to determine whether the extent of this restriction is reasonable, is a consideration of the importance of the purpose and the benefit sought to be achieved[108].  Logically, the greater the restriction on the freedom, the more important the public interest purpose of the legislation must be for the law to be proportionate.  It has been observed[109] that notions of balancing may be seen in Castlemaine Tooheys Ltd v South Australia[110], in the context of the s 92 freedom.

    [107]Barak, Proportionality:  Constitutional Rights and their Limitations, (2012) at 340.

    [108]Grimm, "Proportionality in Canadian and German Constitutional Jurisprudence", (2007) 57 University of Toronto Law Journal 383 at 396.

    [109]Zines, The High Court and the Constitution, 5th ed (2008) at 59.

    [110](1990) 169 CLR 436; [1990] HCA 1.

88. It will be evident from the conclusion to these reasons that the methodology to be applied in this aspect of proportionality does not assume particular significance.  Fundamentally, however, it must proceed upon an acceptance of the importance of the freedom and the reason for its existence.  This stands in contrast to the basic rule of balancing as applied to human rights, which has been subject to criticism for failing to explain the reasons underlying the creation of the right in order to put the reasons for its protection, or which justify its limitation, in perspective[111].

    [111]Barak, Proportionality:  Constitutional Rights and their Limitations, (2012) at 542.

89. The balance struck between the importance of the purpose and the extent of the restriction on the freedom necessarily involves a value judgment.  The fact that a value judgment is involved does not entitle the courts to substitute their own assessment for that of the legislative decision-maker[112]. This accords with the view, so often expressed by this Court, as to the role of Chapter III courts under the separation of powers effected by the Constitution. However, the courts have a duty to determine the limit of legislative power affecting constitutionally guaranteed freedoms, and assessments by courts of the public interest and benefit in a piece of legislation are commonplace. In ACTV and Nationwide News, and in later cases, the public interest pursued by the legislation in question was identified as relevant to whether a restriction on the freedom was justified[113].

    [112]Bank Mellat v HM Treasury (No 2) [2014] AC 700 at 789-790 [71] per Lord Reed JSC; R (Lord Carlile of Berriew) v Secretary of State for the Home Department [2015] AC 945 at 964 [20] per Lord Sumption JSC.

    [113]Nationwide News Pty Ltd v Wills (1992) 177 CLR 1 at 77; Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 142, 143, 146, 169, 171; Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104 at 183-184; Cunliffe v The Commonwealth (1994) 182 CLR 272 at 341-344.

90. To say that the courts are able to discern public benefits in legislation which has been passed is not to intrude upon the legislative function.  The courts acknowledge and respect that it is the role of the legislature to determine which policies and social benefits ought to be pursued.  This is not a matter of deference.  It is a matter of the boundaries between the legislative and judicial functions.

91. Deference to legislative opinion, in the sense of unquestioning adoption of the correctness of these choices, does not arise for courts.  It is neither necessary nor appropriate for the purposes of the assessment in question.  The process of proportionality analysis does not assess legislative choices except as to the extent to which they affect the freedom.  It follows from an acceptance that it is the constitutional duty of courts to limit legislative interference with the freedom to what is constitutionally and rationally justified, that the courts must answer questions as to the extent of those limits for themselves.

92. It should also be said that deference in the sense mentioned is not to be confused with a "margin of appreciation", a term which is sometimes given an extended meaning.  In the context of courts of the European Community and now European Union, it is best understood as reflecting an acceptance by those courts of the advantage that courts of member states have with respect to particular matters, for example, moral standards applicable and the necessity for a restriction or penalty to meet them[114].  In the national context, it is said to require the examination of the constitutionality of a limitation on a human right from the standpoint of the international community[115].  Neither meaning would appear to have any application in the context of an Australian court determining the limits to legislative power affecting the freedom.

    [114]Handyside v United Kingdom (1976) 1 EHRR 737.

    [115]Barak, Proportionality:  Constitutional Rights and their Limitations, (2012) at 420.

93. In this case, the third stage of the test presents no difficulty for the validity of the impugned provisions.  The provisions do not affect the ability of any person to communicate with another about matters of politics and government nor to seek access to or to influence politicians in ways other than those involving the payment of substantial sums of money.  The effect on the freedom is indirect.  By reducing the funds available to election campaigns there may be some restriction on communication by political parties and candidates to the public.  On the other hand, the public interest in removing the risk and perception of corruption is evident.  These are provisions which support and enhance equality of access to government, and the system of representative government which the freedom protects.  The restriction on the freedom is more than balanced by the benefits sought to be achieved.

94. The questions stated should be answered as follows:

    1.In so far as Div 4A prohibits the making by a property developer of a political donation or acceptance of a political donation from a property developer, it is not invalid. It does not impermissibly burden the implied freedom of communication on governmental and political matters contrary to the Constitution.

    2.No.

    3.No.

    4.        The plaintiffs.

    GAGELER J.

    Introduction

95. This is the second case in as many years in which provisions of Pt 6 of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) have been challenged in the original jurisdiction of this Court on the ground that they impermissibly burden the implied constitutional freedom of political communication.

96. The challenge in the first case, Unions NSW v New South Wales[116], was to s 96D and to s 95G(6). Section 96D prohibited political donations by corporations, industrial associations and individuals who were not on the roll of electors. Section 95G(6) aggregated electoral communication expenditure of a political party with that of an affiliated organisation for the purpose of determining whether the political party exceeded the applicable cap on electoral communication expenditure imposed by Div 2B. Both provisions were held to impose impermissible burdens on the implied constitutional freedom.

    [116](2013) 252 CLR 530; [2013] HCA 58.

97. The challenge in this case is to Div 2A (ss 95AA to 95D), s 96E and Div 4A (ss 96GAA to 96GE) in Pt 6 of the Act. Division 2A imposes a general cap on the amounts which all persons are permitted to give as political donations in relation to State elections. Section 96E prohibits the making of certain indirect contributions to election campaigns. Division 4A relevantly prohibits the making of any political donations by corporate property developers and individuals closely associated with corporate property developers.

320. The first condition that Div 2A must satisfy under the second question is that the object or end that it serves is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government[389].  That condition directs the inquiry to the purpose (the object or end) of the impugned law as disclosed by its text and context and, if relevant, its history.  An aspect of the condition is that the operation of the impugned law must be rationally connected to the end that it serves[390].

     [389]Lange (1997) 189 CLR 520 at 561-562; Attorney-General (SA) v Adelaide City Corporation (2013) 249 CLR 1 at 61 [131]; [2013] HCA 3; Unions NSW (2013) 252 CLR 530 at 556 [46].

     [390]Unions NSW (2013) 252 CLR 530 at 557 [50], 558-560 [55]-[60].

321. As has already been noted, ss 95A and 95B of the Act operate to impose a cap upon the amount of political donations that may be made by any one person by reference to the nature of the recipient. The provisions operate generally so as to limit the amount of political donations that may be accepted from any one person.

322. What then is the object or end of the division, as disclosed by its text and context and, if relevant, its history?  First, the caps remove the need for, and ability to make, large-scale political donations to a party or candidate.  In so doing, they reduce the risk to the actual and perceived integrity of governmental processes.  That is so because it is self-evident that the larger the donation provided or obtained, the greater the influence the donor is likely to have, as well as be seen to have, in relation to those processes.

323. Second, by imposing a uniform limit on the amount that can be obtained from any one source, ss 95A and 95B reduce the extent to which those persons or entities with more money have, and are perceived to have, greater political influence than others who do not have such substantial funds.

324. Third, Div 2A works to ensure that the rights of individuals are secured so that each individual has an equal share, or at least a more equal share than they would otherwise have, in political power[391]. 

     [391]See ACTV (1992) 177 CLR 106 at 139-140.

325. Each of those objects or ends is legitimate and compatible with the maintenance of the constitutionally prescribed system of representative and responsible government.

326. The plaintiffs contended that donation caps do not rationally serve the objects or ends of reducing the risk to the actual and perceived integrity of governmental processes.  For the reasons just explained, that contention should be rejected[392].

     Question 2, second condition – is the law reasonably appropriate and adapted to serve that legitimate end?

     [392]cf Unions NSW (2013) 252 CLR 530 at 558 [53], 578 [136].

327. The second condition that Div 2A must satisfy under the second question is that the law is reasonably appropriate and adapted to serve the identified legitimate objects or ends in a manner which is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government.

328. The answer to this condition may involve and be assisted by a consideration of whether there are alternative, reasonably practicable and less restrictive means of achieving the same end which are obvious and compelling[393].  To qualify as a true alternative for this purpose, a hypothetical law must be as effective as the impugned law in achieving the identified objects and ends[394].  The requirement that the alternative means be "obvious and compelling" ensures that consideration of the alternatives remains a tool of analysis in applying the required criterion[395] and that the courts do "not exceed their constitutional competence by substituting their own legislative judgments for those of parliaments"[396].  If no other hypothetical legislative measure that would be as effective can be identified it may be concluded that the impugned law goes no further than is reasonably necessary in achieving its object or end[397].

     [393]Monis (2013) 249 CLR 92 at 214 [347]; Unions NSW (2013) 252 CLR 530 at 556 [44].

     [394]Tajjour (2014) 88 ALJR 860 at 888 [114]; 313 ALR 221 at 254.

     [395]Tajjour (2014) 88 ALJR 860 at 876 [36], 889 [115]; 313 ALR 221 at 238, 254.

     [396]Tajjour (2014) 88 ALJR 860 at 876 [36]; 313 ALR 221 at 238. See also ACTV (1992) 177 CLR 106 at 159; Cunliffe v The Commonwealth (1994) 182 CLR 272 at 325; [1994] HCA 44; Coleman v Power (2004) 220 CLR 1 at 52-53 [100]; Adelaide City Corporation (2013) 249 CLR 1 at 42-43 [65]; Monis (2013) 249 CLR 92 at 214 [347].

     [397]Tajjour (2014) 88 ALJR 860 at 889 [115]-[116]; 313 ALR 221 at 254.

329. The plaintiffs' contention that Div 2A was not reasonably appropriate and adapted to serve the identified legitimate objects or ends relied upon four primary submissions. Each submission will be dealt with in turn.

330. First, the plaintiffs submitted that Div 2A goes too far because it "fails to target only actual instances of corruption". That submission should be rejected. Division 2A legitimately targets both actual and perceived threats to the integrity of the system of representative and responsible government.  The plaintiffs' submission postulates an alternative law confined to donations which are intended as corrupting, or, in other words, constitute bribery.  Bribery, generally or in the context of political donations, is inherently difficult to detect and prove.  The law proposed by the plaintiffs would address actual but not perceived threats to the integrity of the system.  It would not achieve the identified legislative objectives.  In this context, it is relevant to observe that donation caps are used in many other countries[398]. This suggests that caps have commonly been perceived to be a useful means to the ends identified. The plaintiffs' alternative law is not an obvious and compelling alternative to Div 2A.

     [398]For example, a 2012 report referred to in the Special Case and extracted in part in the Special Case Book states that caps on donations by individuals were imposed by Belgium, Bulgaria, Finland, France, Greece, Ireland, Latvia, Lithuania, Poland, Portugal, Romania, Slovenia and Spain:  Transparency International, Money, Politics, Power:  Corruption Risks in Europe, (2012) at 54.

331. Second, the plaintiffs submitted that requirements of public disclosure[399] could achieve the identified ends. That submission should be rejected. Disclosure is one of the tools already employed in Pt 6 of the Act. That fact does not establish that it is a sufficient tool of itself to achieve the identified ends.

     [399]See [297]-[298] above.

332. Next, the plaintiffs submitted that the provisions do not achieve the stated legislative objective "comprehensively".  That submission does not advance the matter.  That the Parliament might have gone further does not establish that the law is not reasonably appropriate and adapted to serve the identified legitimate objects or ends.  Questions of legislative judgment form no part of the analysis of the second condition[400].

     [400]Tajjour (2014) 88 ALJR 860 at 876 [36]; 313 ALR 221 at 238.

333. Finally, the plaintiffs submitted that Div 2A imposes a burden on political communication "in a discriminatory way", first by "singling out those kinds of donors who might otherwise have wished to make donations in amounts above the applicable caps" (said to be a minority of overall donors), and second by having "an unequal practical effect upon the recipients of those donations" (because those who might have greater financial support from fewer sources are "effectively discriminated against").  That submission should be rejected.

334. The law affects those whom the law affects. The donation cap provisions in ss 95A and 95B operate in a uniform manner as between all donors and all recipients, regardless of what parties, members, candidates or causes donors wish to support. Division 2A is addressed in part to the inequality of political influence in favour of wealthy entities or persons that results from large political donations. Parliament was entitled to take the view that that inequality should be addressed.

335. The plaintiffs have not advanced any hypothetical provision that would be as effective as Div 2A in achieving the legislative purposes[401].  No other hypothetical legislative measure that would be as effective having been identified, it may be concluded that the impugned law goes no further than is reasonably necessary in achieving its object or end.

     [401]cf Tajjour (2014) 88 ALJR 860 at 888-889 [114]; 313 ALR 221 at 254.

336. The next available tool of analysis to assess the second condition in question 2 is to examine the extent of the identified burden on the implied freedom[402].  This is not "an 'ad hoc balancing' process without criteria or rules for measuring the value of the means (the burden of the provision) against the value of the end (the legitimate purpose)"[403] (emphasis added).  Because there are no criteria or rules by which a "balance" can be struck between means and ends, the question is not one of balance or value judgment but rather whether the impugned law impermissibly impairs or tends to impair the maintenance of the constitutionally prescribed system of representative and responsible government having regard not only to the end but also to the means adopted in achieving that end[404].  That, of course, is a question of judgment.  It is a question of judgment about the nature and extent of the effect of the impugned law on the maintenance of the constitutionally prescribed system of representative and responsible government. 

     [402]Tajjour (2014) 88 ALJR 860 at 885 [91], 889 [116]; 313 ALR 221 at 250, 254-255.

     [403]Coleman v Power (2004) 220 CLR 1 at 46 [83], citing Stone, "The Limits of Constitutional Text and Structure: Standards of Review and the Freedom of Political Communication", (1999) 23 Melbourne University Law Review 668.

     [404]Coleman v Power (2004) 220 CLR 1 at 50 [92].

337. The extent and nature of the burden on the implied freedom of political communication imposed by the means adopted to achieve an identified end will be case specific and, therefore, any analysis must be case specific.  This common law approach has at least two distinct advantages.  It recognises that we are dealing not with protected individual rights[405] but with negative restrictions on legislative powers and, secondly, it permits the development of different criteria for different constitutional contexts[406].

     [405]cf Charter of Human Rights and Responsibilities Act 2006 (Vic); Human Rights Act 2004 (ACT).

     [406]See Dietrich v The Queen (1992) 177 CLR 292 at 319-321; [1992] HCA 57; ICM Agriculture Pty Ltd v The Commonwealth (2009) 240 CLR 140 at 199 [141]; [2009] HCA 51. See also, eg, the incremental development of the law in negligence: Sutherland Shire Council v Heyman (1985) 157 CLR 424 at 481; [1985] HCA 41; Hill v Van Erp (1997) 188 CLR 159 at 178-179; [1997] HCA 9; Cattanach v Melchior (2003) 215 CLR 1 at 24 [39]; [2003] HCA 38.

338. Thus, when asking what is "the extent of the burden effected by [Div 2A] on the freedom"[407] or to what extent does Div 2A affect or burden the freedom[408], it is neither right nor relevant to ask whether the benefits which will follow from application of the impugned law are "larger than" or "outweigh" the diminution in political communication (a test of proportionality strictly so called and sometimes seen as part of proportionality analysis[409]). 

     [407]Tajjour (2014) 88 ALJR 860 at 889 [116]; 313 ALR 221 at 254.

     [408]Unions NSW (2013) 252 CLR 530 at 554 [36], 555 [40].

     [409]cf Canada (Attorney General) v Bedford [2013] 3 SCR 1101, especially at 1150-1152 [120]-[123].

339. In this and other respects, there can be no automatic adoption or application of forms of legal analysis made in overseas constitutional contexts[410].  Not only do those analyses reflect the contexts in which they are made, they are analyses made for purposes different from the application of the accepted principles of Lange (as now understood) and the constitutional framework which underpins those principles in Australia.  The danger of uncritical use of proportionality from other legal contexts was explained by Gleeson CJ in Roach v Electoral Commissioner[411].  After reviewing decisions of the European Court of Human Rights and the Supreme Court of Canada, Gleeson CJ acknowledged that aspects of reasoning from other contexts could be instructive but said[412]:

     "There is a danger that uncritical translation of the concept of proportionality from [other] legal context[s]  ... to the Australian context could lead to the application in this country of a constitutionally inappropriate standard of judicial review of legislative action.  Human rights instruments which declare in general terms a right, such as a right to vote, and then permit legislation in derogation of that right, but only in the case of a legitimate objective pursued by means that are no more than necessary to accomplish that objective, and give a court the power to decide whether a certain derogation is permissible, confer a wider power of judicial review than that ordinarily applied under our Constitution. They create a relationship between legislative and judicial power significantly different from that reflected in the Australian Constitution".  (emphasis added)

     [410]Coleman v Power (2004) 220 CLR 1 at 46-50 [83]-[91]; Mulholland (2004) 220 CLR 181 at 200 [39]; Tajjour (2014) 88 ALJR 860 at 890 [129]; 313 ALR 221 at 256-257, citing Barak, Proportionality:  Constitutional Rights and their Limitations, (2012) at 240-241.

     [411](2007) 233 CLR 162; [2007] HCA 43.

     [412](2007) 233 CLR 162 at 178-179 [17]. See also Zines, "Federalism and Administrative Discretion in Australia, with European Comparisons", (2000) 28 Federal Law Review 291 at 302.

340. So, what is the extent of the burden imposed on the implied freedom by Div 2A? That is, does the impugned law impermissibly impair or tend to impair the maintenance of the constitutionally prescribed system of representative and responsible government having regard not only to the end but also to the means adopted in achieving that end? In the case of Div 2A, the burden on the freedom is slight.

341. First, Div 2A imposes a cap on the amount of political donations that may be made, thereby limiting the funds available to a party, candidate or member[413]. However, that limitation is addressed, at least in part, by a regime of public funding for parties and candidates in State elections in Pt 5 of the Act.

     [413]ss 95A and 95B.

342. Second, as already noted, Div 2A does not directly restrict political communication[414].  It does not directly touch upon the "indispensable element" of representative and responsible government. 

     [414]See [315] above.

343. Third, making a donation communicates no content to electors. The act of donating is private. The donation may be made to support the political process generally (donors may donate to more than one party), to garner influence, to support the recipient's policies or for other reasons. If any particular message is to be communicated by the donor, it would need to be expressed by words separate from, and in addition to, the donation. The public disclosure requirements in the Act do not alter that conclusion. The fact that details of donations of or exceeding $1,000 are required to be disclosed within weeks of the end of June of each year, and made public as soon as practicable thereafter[415], does not alter the character or effect of any donation, regardless of amount.

     [415]ss 89, 91 and 95.

344. Fourth, Div 2A arguably maintains and enhances the implied freedom. It seeks to prevent corruption and the appearance of corruption by restricting large contributions that could be given to secure a political quid pro quo[416]. Division 2A seeks to prevent patronage, undue influence or buying access (or the appearance of them) by restricting large contributions. And Div 2A works to ensure that the rights of individuals are secured so that each individual has an equal share, or at least a more equal share than they would otherwise have, in political power.  These effects may be seen not to distort and corrupt the political process, but to enhance it. 

     [416]cf Citizens United v Federal Election Commission 558 US 310 at 345 (2010).

345. For those reasons, Div 2A is reasonably appropriate and adapted to achieve its legitimate objects or ends. The answer to Question 2 stated for the opinion of the Full Court is "No".

     Division 4A as it relates to property developers

346. Section 96GA, the central operative provision in Div 4A, prohibits a property developer from making political donations and prohibits a person from accepting political donations from a property developer. It applies to both State and local government.

     Question 1 – is the implied freedom burdened?

347. Section 96GA restricts the funds available to political parties and candidates to meet the costs of political communication[417]. Accordingly, and to that extent, Div 4A effectively burdens freedom of communication about government or political matters in its terms, operation or effect. Indeed, the burden is admitted. The answer to question 1 is "yes".

     [417]See Unions NSW (2013) 252 CLR 530 at 554 [38].

348. Are the plaintiffs correct to contend that question 1 is also satisfied because Div 4A imposes a restriction on the means by which members of the community may choose to engage with political affairs and thereby express support for, and lend support to the expression by others of support for, political positions and objectives? The answer is no. The implied freedom does not create a personal right[418]. No less importantly, as with Div 2A, s 96GA does not directly restrict political communication. It does not directly touch upon the "indispensable element" of representative and responsible government[419].  The fact of making a donation communicates no content to electors[420]. 

     [418]See [316]-[319] above.

     [419]See [301] above.

     [420]See [343] above.

     Question 2, first condition – legitimate object of the impugned law?

349. Is the object or end that Div 4A serves compatible with the maintenance of the constitutionally prescribed system of representative and responsible government? As already seen, that condition directs the inquiry to the purpose of the impugned law as disclosed by its text and context and, if relevant, its history.

350. Section 96GA prohibits the making and acceptance of political donations from "prohibited donors".  A "property developer" is a prohibited donor[421].  A property developer, as defined, has certain characteristics.  A corporation is a property developer if it is engaged in a business that regularly involves the making of planning applications of a specified nature by or on behalf of the corporation, where those applications are in connection with the residential or commercial development of land with the ultimate purpose of the sale or lease of the land for profit[422].  A person who is a close associate of such a corporation is also a property developer[423].

     [421]s 96GAA(a).

     [422]s 96GB(1)(a).

     [423]s 96GB(1)(b). The definition of close associate is extracted at [295] above.

351. Section 96GA is part of a larger suite of measures in the Act, the purpose of which is to closely regulate political donations. The Act is evidently directed to seeking to address the potential for persons and entities to exercise – or to be perceived to exercise – undue, corrupt or hidden influence over the Parliament of New South Wales, the government of New South Wales and local government bodies within New South Wales, together with their members and processes[424].

     [424]See [280]-[298] above.

352. Division 4A is specific – not general. It prohibits donations by particular types of businesses, and by associated persons – relevantly, property developers.

353. The plaintiffs contended that there is no rational connection between the operation of Div 4A in its application to property developers and the achievement of the identified purpose. The plaintiffs also contended that setting out to prohibit a class of persons from participating in the political process, to the extent that Div 4A does so, does not serve a legitimate end. The plaintiffs asserted that there "is nothing different or special … about property developers as a class of persons, or their business", seeking "to encourage social or regulatory change in [their] own interest by participating in public political affairs". Those contentions should be rejected.

354. The plaintiffs observed that all members of the community are subject to varying forms of regulation and submitted that there is nothing to distinguish property developers from "trade unions, banks, lawyers, accountants, financial advisers, real estate agents, media proprietors, supermarket chains, or pharmaceutical companies".  But property developers are sufficiently distinct from these other classes of persons to merit specific regulation in light of the nature of their business activities and the nature of the public powers which they may seek to influence in their self-interest.  The value of land is peculiarly tied to governmental decisions relating to such matters as zoning and whether or not particular development applications are approved.  These governmental decisions often involve State and local government officers in an individualised, discretionary decision-making process.  It is therefore unsurprising that there are concerns about the actual and perceived susceptibility of members of State and local government to influence from property developers.

355. Accordingly, there is a rational connection between the class of persons (property developers) and the end sought to be achieved.  The prohibition in s 96GA as it relates to property developers is rationally directed to serving a legitimate end that is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government[425].

     Question 2, second condition – is the law reasonably appropriate and adapted to serve that legitimate end?

     [425]Unions NSW (2013) 252 CLR 530 at 556 [46], 557 [50].

356. Is Div 4A reasonably appropriate and adapted to serve the identified legitimate objects or ends in a manner which is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government?

357. There are a number of points to be made about the plaintiffs' submissions about whether Div 4A meets this standard.

358. First, the plaintiffs have not identified any material distortion of the constitutional system resulting from the prohibition on property developers (as defined) making political donations to parties or candidates, and on parties or candidates accepting such donations, which might suggest that the law does not meet the standard.  

359. Second, so far as the plaintiffs rely upon the absence of any equivalent provision in other jurisdictions as indicating a legislative assumption that political donations by property developers are not "inherently corrupt", that assumption, even assuming it to be correct, says nothing about whether the means in Div 4A are reasonably appropriate and adapted to serve the object or end of that division. New South Wales has its own history[426].  The implied freedom does not mandate some lowest common denominator approach to regulation. 

     [426]See, eg, Independent Commission Against Corruption, Report on Investigation into North Coast Land Development, (1990); Independent Commission Against Corruption, Report on Investigation into the Conduct of Brian Zouch, (1993); Independent Commission Against Corruption, Report on Investigation into Randwick City Council, (1995); Independent Commission Against Corruption, Report into corrupt conduct associated with development proposals at Rockdale City Council, (2002); Independent Commission Against Corruption, Corruption risks in NSW development approval processes, (2007).  See also, for example, Environmental Planning and Assessment Act 1979 (NSW), ss 89D and 89E.

360. Third, the plaintiffs' argument did not squarely address the existence and operation of s 96GE.  Section 96GE(1) provides that a person, the applicant, may apply for a determination by the Commission that the applicant or another person is not a prohibited donor for the purposes of Div 4A. The Commission is authorised to make such a determination if the Commission is satisfied that it is more likely than not that the person is not a prohibited donor[427].  Not insignificantly, the Commission is to make its determination solely on the basis of information provided by the applicant[428].

     [427]s 96GE(2).

     [428]s 96GE(2).

361. Fourth, the key alternative hypothetical advanced by the plaintiffs (namely that Div 4A could have been confined to "the making of political donations with some form of intention corruptly to solicit favour") does not assist. Provisions of that kind already exist[429] and those measures deal directly with the aftermath of corruption, not its prevention.  They deal with actual corruption, not with the perception of corruption.  Those provisions do not and cannot achieve the regulatory end to the same extent.  They are not a true alternative for the purposes of the analysis[430].  Finally, the other suggestion seemingly proffered by the plaintiffs – that there be no regulation of property developers – is also not a true alternative and is not obvious and compelling. 

     [429]See, eg, Crimes Act 1900 (NSW), ss 249B(1), 249B(2), 249D, 249F.

     [430]Monis (2013) 249 CLR 92 at 214 [347]; Tajjour (2014) 88 ALJR 860 at 888-889 [113]-[114]; 313 ALR 221 at 254.

362. No other, less drastic, means of achieving the legitimate end have been identified.  No other hypothetical legislative measure that would be as effective having been identified, it may be concluded that the impugned law goes no further than is reasonably necessary in achieving its object or end.

363. It is then necessary to move to consider how, or to what extent, Div 4A affects or burdens the freedom. As stated above, this requires answering the following question – does the impugned law impermissibly impair or tend to impair the maintenance of the constitutionally prescribed system of representative and responsible government having regard not only to the end but also to the means adopted in achieving that end?  This question should be addressed at two levels – the burden on political communication generally and the specific burden on property developers. 

364. Division 4A does not impose a significant burden on political communication. In particular, Div 4A does not directly restrict political communication. It does not constrain a prohibited donor from voicing support for or otherwise publicly associating themselves with (or disassociating themselves from) a party or candidate. It does not constrain them from advocating or communicating as they wish, subject to the general expenditure caps[431] (which are not the subject of challenge). Division 4A "proscribes the making of donations" – it does not proscribe "publicising the support which the making of donations might be taken to imply"[432]. 

     [431]Pt 6 Div 2B.

     [432]See Unions NSW (2013) 252 CLR 530 at 572 [112].

365. Indeed, Div 4A maintains and arguably enhances the implied freedom. It seeks to prevent corruption and the appearance of corruption by contributions from property developers that could be given to secure a political quid pro quo[433]. Division 4A seeks to prevent patronage, undue influence or buying access (or the appearance of one of them) by restricting contributions from property developers. And Div 4A works to ensure that the rights of individuals are secured by ensuring that each individual has an equal, or at least a more equal, share in political power.  These may be seen not to distort and corrupt the political process, but to enhance it.

     [433]cf Citizens United 558 US 310 at 345 (2010).

366. The other aspect is to consider whether Div 4A imposes an undue burden on political communication by property developers. Or, to put it in other terms, is Div 4A discriminatory in its nature in relation to property developers such that it is invalid? The answer is no. As has been explained[434], property developers are one of a limited group of entities and individuals defined as "prohibited donors". Under the Act, a property developer is a corporation that meets certain criteria (or a close associate of such a corporation). The extent of the burden peculiar to property developers (as defined in the Act) is that they are prevented from making any political donations in State elections and local government elections.

     [434]See [293]-[295] above.

367. The burden on the freedom of communication in relation to a property developer is slight. As we have seen, Div 4A does not constrain a property developer from voicing support for or otherwise publicly associating themselves with (or disassociating themselves from) a party or candidate. It does not constrain a property developer from advocating or communicating as they wish, subject to the general expenditure caps (which are not the subject of challenge). Why then the focus on property developers as distinct from other donors? For the reasons outlined at [354] above, property developers are sufficiently distinct from other classes of persons to merit specific regulation.

368. And, of course, the ban can be lifted.  A property developer can apply under s 96GE for a determination by the Commission that the applicant or another person is not a prohibited donor for the purposes of Div 4A. Finally, the burden on property developers may in fact enhance the implied freedom[435].

     [435]See [365] above.

369. For those reasons, Div 4A is reasonably appropriate and adapted to achieve its legitimate purpose. I agree with the answer to Question 1 stated for the opinion of the Full Court proposed by the plurality.

     Section 96E – indirect benefits

370. Section 96E of the Act makes it unlawful (subject to certain exceptions[436]) to make indirect campaign contributions of four kinds:  first, the provision of office accommodation, vehicles, computers or other equipment for no consideration or inadequate consideration for use solely or substantially for election campaign purposes[437]; second, the full or part payment by a person other than the party, elected member, group or candidate of electoral expenditure for advertising or other purposes incurred or to be incurred by the party, elected member, group or candidate (or an agreement to make such a payment)[438]; third, the waiving of all or any part of payment to the person by the party, elected member, group or candidate of electoral expenditure for advertising incurred or to be incurred by the party, elected member, group or candidate[439]; and fourth, any other goods or services of a kind prohibited by the regulations[440] – of which there are presently none.

     [436]s 96E(3).

     [437]s 96E(1)(a).

     [438]s 96E(1)(b).

     [439]s 96E(1)(c).

     [440]s 96E(1)(d).

     Question 1 – is the implied freedom burdened?

371. As is apparent from their collective description as "indirect campaign contributions" in s 96E(1), the making of each of the contributions identified in s 96E is not as readily detectable as a political donation.

372. Indeed, in each instance listed in s 96E(1) there is a particular character required – each category involves the provision of something of value. The first category involves the provision of certain goods or services for no or inadequate consideration and for use solely or substantially for election campaign purposes. The second and third categories involve payment, or waiver of payment, for electoral expenditure for advertising for the party, member, group or candidate. A person wishing to benefit the party, member, group or candidate in the relevant way could instead do so in money, to equivalent effect.

373. There is no dispute that these constraints operate as a burden on the implied freedom.  The answer to question 1 is "yes".

     Question 2, first condition – legitimate object of the impugned law?

374. Is the object or end that s 96E serves compatible with the maintenance of the constitutionally prescribed system of representative and responsible government?

375. Section 96E prohibits indirect campaign contributions (subject to the exclusions), thus directing the provision of benefits into a monetary form. The provision aids the disclosure requirements in Div 2 of Pt 6 by enabling the ready expression of benefits in monetary terms. It also aids the efficacy of the caps, cutting off a possible route of circumvention where detection may be difficult[441]. It is an anti-avoidance provision. Viewed in the context of the suite of legislative measures in the Act which are aimed at the transparent regulation of political donations and expenditure, s 96E can be taken to further the purpose of minimising the risk to the actual and perceived integrity of the State Parliament and the institutions of local government.

     [441]See, eg, New South Wales, Legislative Council, Parliamentary Debates (Hansard), 18 June 2008 at 8579.

376. The purposes of s 96E are legitimate within the context of the constitutionally prescribed system of representative and responsible government for the same reasons that the disclosure and donation cap provisions are legitimate.

377. The plaintiffs' contention that because there is no textual link between s 96E and the disclosure provisions in Div 2 of Pt 6 and, further, that the donation caps in Div 2A of Pt 6 were only introduced later and so any congruence of operation between them and s 96E "is sheer happenstance" may be put to one side. It is not necessary for the provision to refer expressly to the other divisions to draw the conclusion that because the provision does aid the other divisions, aiding those divisions can be taken to be a purpose of the provision. The amendments are to be read together "as a combined statement of the will of the legislature"[442]. 

     Question 2, second condition – is the law reasonably appropriate and adapted to serve that legitimate end?

     [442]Commissioner of Stamps (SA) v Telegraph Investment Co Pty Ltd (1995) 184 CLR 453 at 463; [1995] HCA 44; Plaintiff S297/2013 v Minister for Immigration and Border Protection (2014) 88 ALJR 722 at 726-727 [25]; 309 ALR 209 at 214; [2014] HCA 24.

378. Is s 96E reasonably appropriate and adapted to serve the identified legitimate objects or ends in a manner which is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government?

379. The only alternative that the plaintiffs advanced is that there could be a requirement for either the donor or recipient of an indirect campaign contribution to provide "a reliable valuation". Such a requirement is impractical. It would impose a potentially significant transaction cost. It would raise issues as to what was sufficient evidence of a reliable valuation. And it would also raise potentially complex definitional issues. The proffered alternative is not an obvious and compelling means of achieving the same end as s 96E. The plaintiffs have not advanced any hypothetical provision that would be as effective as s 96E in achieving the legislative purposes[443]. It may therefore be concluded that s 96E goes no further than is reasonably necessary in achieving its purpose.

     [443]cf Tajjour (2014) 88 ALJR 860 at 888-889 [114]; 313 ALR 221 at 254.

380. The burden imposed on the freedom is incidental and slight.  The provision operates as a partial limit on the ability of parties, members and candidates to raise funds, or equivalent benefits, which might be used by those recipients to engage in political communication.  Equivalent monetary benefits could otherwise be provided – subject to the limits which have been addressed above.  The provision is only a restriction on the form in which donations may be made.

381. Section 96E is reasonably appropriate and adapted to serve its legitimate object or end. It seeks to prevent corruption and the appearance of corruption by restricting indirect campaign contributions.  This may be seen not to distort and corrupt the political process but to maintain and enhance the implied freedom. 

382. For those reasons, the answer to Question 3 stated for the opinion of the Full Court is "No".

     Question 4

383. The plaintiffs should pay the costs.