Unions NSW v New South Wales

HIGH COURT OF AUSTRALIA

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

UNIONS NSW & ORS  PLAINTIFFS

AND

STATE OF NEW SOUTH WALES  DEFENDANT

Unions NSW v New South Wales

[2019] HCA 1

29 January 2019

S204/2018

ORDER

The questions stated by the parties for the consideration of the Full Court be answered as follows:

1.Is s 29(10) of the Electoral Funding Act 2018 (NSW) invalid because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution?

Answer

Yes.

2.Is s 35 of the Electoral Funding Act 2018 (NSW) invalid (in whole or in part and, if in part, to what extent), because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution?

Answer

Unnecessary to answer.

3.Who should pay the costs of the special case?

Answer

The defendant.

Representation

J T Gleeson SC with N J Owens SC and C G Winnett for the plaintiffs (instructed by Holding Redlich Lawyers)

M G Sexton SC, Solicitor-General for the State of New South Wales, and J K Kirk SC with B K Lim for the defendant (instructed by Crown Solicitor's Office (NSW))

S P Donaghue QC, Solicitor-General of the Commonwealth, with C L Lenehan and C J Tran for the Attorney-General of the Commonwealth, intervening (instructed by Australian Government Solicitor)

P J Dunning QC, Solicitor-General of the State of Queensland, with F J Nagorcka for the Attorney-General of the State of Queensland, intervening (instructed by Crown Solicitor (Qld))

J A Thomson SC, Solicitor-General for the State of Western Australia, with G J Stockton for the Attorney-General for the State of Western Australia, intervening (instructed by State Solicitor's Office (WA))

M J Wait SC with K M Scott for the Attorney-General for the State of South Australia, intervening (instructed by Crown Solicitor's Office (SA))

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

CATCHWORDS

Unions NSW v New South Wales

Constitutional law (Cth) – Implied freedom of communication on governmental and political matters – Where s 29(10) of Electoral Funding Act 2018 (NSW) ("EF Act") substantially reduced cap on electoral expenditure applicable to third‑party campaigners from cap applicable under previous legislation – Where third‑party campaigners subject to substantially lower cap than political parties – Where s 35 of EF Act prohibits third-party campaigner from acting in concert with another person to incur electoral expenditure exceeding cap – Where preparatory materials to EF Act recommended reduction in cap for various reasons, including that third parties should not be able to "drown out" political parties, which should have a "privileged position" in election campaigns – Where subsequent parliamentary committee report recommended that, before reducing cap, government consider whether proposed reduced cap would enable third‑party campaigners reasonably to present their case – Where no evidence that such consideration was undertaken – Whether s 29(10) enacted for purpose compatible with maintenance of constitutionally prescribed system of representative government – Whether s 29(10) necessary to achieve that purpose – Whether necessary to decide validity of s 35.

Words and phrases – "capped expenditure period", "compatible with maintenance of the constitutionally prescribed system of representative government", "deference to Parliament", "domain of selections", "domain of the legislative discretion", "effect of the law", "electoral expenditure", "expenditure cap", "justified", "legislative purpose", "legitimate purpose", "level playing field", "marginalise", "margin of appreciation", "necessity", "reasonably appropriate and adapted", "third-party campaigner".

Constitution, ss 7, 24.
Electoral Funding Act 2018 (NSW), ss 3, 29, 33, 35.
Election Funding, Expenditure and Disclosures Act 1981 (NSW), ss 4, 4A, 95F.

1. KIEFEL CJ, BELL AND KEANE JJ.   In Unions NSW v New South Wales[1] ("Unions NSW [No 1]") and in McCloy v New South Wales[2] consideration was given by this Court to the general structure, key provisions and purposes of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) ("the EFED Act"). The Electoral Funding Act 2018 (NSW) ("the EF Act") replaced the EFED Act although it generally retains the scheme of the EFED Act with respect to caps on political donations and electoral expenditure. The questions stated in the parties' special case concern certain changes effected by the EF Act. The first involves the reduction in the amount that third-party campaigners, such as the plaintiffs, are permitted to spend on electoral campaigning[3].  The second is a prohibition on third-party campaigners acting in concert with others so that the cap applicable to the third-party campaigners is exceeded[4].  The plaintiffs contend that each of the provisions effecting these changes is invalid because it impermissibly burdens the implied freedom of communication on matters of politics and government which is protected by the Constitution.

   [1](2013) 252 CLR 530; [2013] HCA 58.

   [2](2015) 257 CLR 178; [2015] HCA 34.

   [3]EF Act, s 29(10); cf EFED Act, s 95F(10).

   [4]EF Act, s 35.

   The EFED Act

2. The general scheme of the EFED Act was to limit the amount or value of political donations to, and the amounts which could be expended in campaigning by, parties, candidates, elected members and others such as third-party campaigners. These amounts were capped by provisions in Pt 6 of the EFED Act[5].  The effect of these limitations was ameliorated to some extent by provisions made for public funding of State election campaigns[6].

   [5]EFED Act, Pt 6, Div 2A and Div 2B.

   [6]EFED Act, Pt 5.

3. The caps on "electoral communication expenditure" – which was defined to include expenditure on advertisements, the production and distribution of election material, the internet and telecommunications[7] – were introduced in 2011[8].  A party, group, candidate or third-party campaigner was prohibited from incurring electoral communication expenditure for a State election campaign during the "capped State expenditure period"[9] for an election if it exceeded the cap on electoral communication expenditure.

   [7]EFED Act, s 87.

   [8]Election Funding and Disclosures Amendment Act 2010 (NSW), Sch 1.

   [9]As defined by EFED Act, s 95H.

4. The base caps imposed by the EFED Act (not taking account of the effects of provisions for indexation at any particular point) with respect to general elections differed as between political parties and others. A party which endorsed more than ten candidates for election to the Legislative Assembly was subject to a cap of $100,000 multiplied by the number of electoral districts in which a candidate was endorsed[10].  "Third-party campaigners", which were defined to mean any person or entity, not being a registered party, elected member, group or candidate, who incurs more than $2,000 electoral communication expenditure during the capped State expenditure period[11], were subject to a total cap of $1,050,000 if registered before the commencement of the capped State expenditure period for the election and $525,000 in any other case[12].  This was the same cap which applied to both a party which endorsed candidates for election to the Legislative Council but endorsed ten or fewer candidates for election to the Legislative Assembly[13] and a group of independent candidates for election to the Legislative Council[14].  Individual or non-grouped candidates were subject to a cap of $150,000[15].

   [10]EFED Act, s 95F(2).

   [11]EFED Act, s 4(1).

   [12]EFED Act, s 95F(10).

   [13]EFED Act, s 95F(3), (4).

   [14]EFED Act, s 95F(5).

   [15]EFED Act, s 95F(7), (8).

5. The amount of money available for campaign expenditure is linked with what is received by way of political donations.  In Unions NSW [No 1] the general purpose of the provisions of the EFED Act which imposed caps on that receipt and expenditure was not in issue. The purpose was to secure the integrity of the legislature and government in New South Wales, which was at risk from corrupt and hidden influences of money[16].  In McCloy it was also accepted that a purpose of capping donations was to ensure that wealth does not create an obstacle to equal participation in the electoral process by allowing the drowning out of the voices of others.  In that sense the provisions seek to create a "level playing field" for those who wish to participate[17].

   [16]Unions NSW [No 1] (2013) 252 CLR 530 at 545 [8].

   [17]McCloy v New South Wales (2015) 257 CLR 178 at 206-208 [43]-[47].

   The EF Act

6. In the period between the decisions in Unions NSW [No 1] and McCloy the EFED Act was amended to include a statement of its objects[18]. The objects of the EF Act, stated in s 3, are in similar terms:

   "(a)to establish a fair and transparent electoral 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 or in local government,

   (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, associated entities, third-party campaigners and donors with the requirements of the electoral funding, expenditure and disclosure scheme."

   [18]EFED Act, s 4A.

7. In the Second Reading Speech to the Bill which became the EF Act[19] it was said that the EF Act is designed to "preserve[] the key pillars of [the EFED Act], namely, disclosure, caps on donations, limits on expenditure and public funding". Accordingly, the EF Act generally retains, with some amendments, the scheme that applied under the EFED Act, including with respect to caps on political donations[20] and caps on electoral expenditure[21].

   [19]New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 May 2018 at 2.

   [20]EF Act, Pt 3, Div 3.

   [21]EF Act, Pt 3, Div 4.

8. The applicable caps for "electoral expenditure" in respect of parties, groups, candidates and third-party campaigners are provided for in s 29. The definition of "third-party campaigner" remains the same[22].  "Electoral expenditure" is defined to mean expenditure on specific items such as advertising and staff "for or in connection with ... influencing, directly or indirectly, the voting at an election"[23].  It is unlawful for a party, group, candidate or third-party campaigner to incur electoral expenditure for a State election campaign during the capped State expenditure period if it exceeds the applicable cap[24]. That period is defined in similar terms to the definition in the EFED Act, namely, in the case of a general election held at the expiry of the Legislative Assembly's fixed term, the period from and including 1 October the year prior to the election until the end of the election day[25].  Some public funding of election campaigns is provided for[26].

   [22]EF Act, s 4.

   [23]EF Act, s 7.

   [24]EF Act, s 33(1).

   [25]EF Act, s 27; cf EFED Act, s 95H.

   [26]EF Act, Pt 4.

9. Although the scheme remains largely the same as the EFED Act, the EF Act introduced some changes and in particular those referred to at the outset of these reasons. Section 29(10) provides that the cap on electoral expenditure which now applies to third-party campaigners registered before the commencement of the capped State expenditure period is $500,000. Section 35(1) makes it unlawful for a third-party campaigner to act in concert with another person or persons to incur electoral expenditure during the capped expenditure period that exceeds the cap applicable to the third-party campaigner. Section 35(2) provides that a person "acts in concert" with another person if the person "acts under an agreement (whether formal or informal) with the other person to campaign with the object, or principal object, of: (a) having a particular party, elected member or candidate elected, or (b) opposing the election of a particular party, elected member or candidate".

   The plaintiffs

10. The plaintiffs are a collection of trade union bodies.  The first plaintiff, Unions NSW, is a peak body consisting of certain unions or branches of unions with members in New South Wales and is the "State peak council" for employees for the purposes of the Industrial Relations Act 1996 (NSW) ("the IR Act"). Each of the second, third, fifth and sixth plaintiffs are organisations of employees formed for the purposes of the IR Act. The fourth plaintiff is a federally registered association of employees under the Fair Work (Registered Organisations) Act 2009 (Cth), with a State branch registered under Ch 5, Pt 3, Div 1 of the IR Act.

11. With the exception of the sixth plaintiff, each plaintiff has registered as a third-party campaigner under the EF Act for the New South Wales State election scheduled for March 2019. With respect to that election the capped State expenditure period commenced on 1 October 2018. The sixth plaintiff, although it was registered under the EFED Act as a third-party campaigner for the State elections in 2011 and 2015, has not registered under the EF Act in respect of the March 2019 election, although it asserts an intention to do so in respect of future elections. Each plaintiff also asserts an intention to incur electoral expenditure during the capped State expenditure period in connection with future New South Wales State elections and to coordinate its campaigns with other trade unions or entities where sufficient common interest exists.

12. In the March 2015 election campaign, which was regulated by the EFED Act, three of the plaintiffs spent more on electoral communication expenditure than would now be permissible under the EF Act. The first plaintiff spent $719,802.81 in electoral communication expenditure. The second plaintiff, the New South Wales Nurses and Midwives' Association, spent $907,831.22. The third plaintiff, the Electrical Trades Union of Australia, New South Wales Branch, spent $793,713.14.

    The questions

13. The following questions have been stated by the parties for the opinion of the Full Court:

    "1. Is section 29(10) of [the EF Act] invalid because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution?

    2. Is section 35 of [the EF Act] invalid (in whole or in part and, if in part, to what extent), because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution?

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

    Question 1

    The issues

14. In Lange v Australian Broadcasting Corporation[27] it was declared that "each member of the Australian community has an interest in disseminating and receiving information, opinions and arguments concerning government and political matters". That freedom is implied by the provision the Commonwealth Constitution makes for representative government and the choice to be made by the people.  The validity of a statutory provision which restricts or burdens that freedom depends upon the answers to questions posed in Lange[28].

    [27](1997) 189 CLR 520 at 571; [1997] HCA 25.

    [28]Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 567.

15. There can be no doubt about the answer to the first enquiry so far as concerns the capping provisions of the EF Act. The capping of both political donations and electoral expenditure restricts the ability of a person or body to communicate to others, to an extent. In Unions NSW [No 1] and in McCloy there was no dispute about the burden effected by the EFED Act on the implied freedom and no party contends to the contrary so far as concerns the EF Act. It may also be observed that a cap on electoral expenditure is a more direct burden on political communication than one on political donations[29] and that the reduction of the cap applicable to third-party campaigners by half effects a greater burden than the previous cap.

    [29]McCloy v New South Wales (2015) 257 CLR 178 at 220-221 [93], 294-295 [367].

16. The plaintiffs' arguments are directed to the second and third questions of the test which was identified in Lange and, with some modifications, confirmed in later decisions of this Court[30].

    [30]Coleman v Power (2004) 220 CLR 1; [2004] HCA 39; Monis v The Queen (2013) 249 CLR 92; [2013] HCA 4; Unions NSW [No 1] (2013) 252 CLR 530; McCloy v New South Wales (2015) 257 CLR 178; Brown v Tasmania (2017) 261 CLR 328; [2017] HCA 43.

17. So far as concerns the second question, the plaintiffs submit that the purpose of s 29(10) is not legitimate, in the sense that it is not compatible with the maintenance of the constitutionally prescribed system of representative government. This has been referred to as "compatibility testing"[31]. The plaintiffs submit that the purpose of s 29(10) is essentially discriminatory. It aims to privilege the voices of political parties in State election campaigns over the voices of persons who do not stand or field candidates, by preventing third-party campaigners from campaigning on a basis equal to parties or groups of independent candidates.

    [31]McCloy v New South Wales (2015) 257 CLR 178 at 194 [2(B)].

18. This submission is subject to two important qualifications. The plaintiffs do not dispute that the wider purposes of the EFED Act were legitimate in the sense discussed in Lange. They accept as accurate the summary of the purposes given for the capping provisions when they were introduced in 2011, namely that they would produce a more level playing field, limit the "political arms race" and prevent the "drowning out" of other voices. The plaintiffs also accept that the EF Act builds upon the EFED Act. It can therefore be inferred that the plaintiffs accept that the EF Act has these wider purposes, but say that s 29(10) does not.

19. The plaintiffs' alternative argument relies upon the requirements of the third Lange question.  That question assumes that the statutory provision has a legitimate purpose and enquires whether the burden which the statute imposes is justified[32].  A provision may be justified if it is "reasonably appropriate and adapted" or proportionate in the means chosen to advance that purpose[33].

    [32]McCloy v New South Wales (2015) 257 CLR 178 at 194 [2(B)], 231 [131].

    [33]Lange v Australian Broadcasting Corporation (1997) 189 CLR 520.

20. The plaintiffs' principal contention in this regard is that it cannot be said that a halving of the cap on third-party campaigners' electoral expenditure is necessary and the burden cannot therefore be justified. There is no historical or factual basis shown for the reduction, nor can there be. By contrast, the figure of $1,050,000 provided for in the EFED Act was not "plucked out of the air"[34] and had regard to the relativities established by that Act.  It is not shown that the level of expenditure there provided for was not effective for the purpose of preventing wealthy voices drowning out others.  Nothing in the reports[35] which preceded the adoption of the sum in s 29(10) and which form part of the special case agreed by the parties explains the need for the reduction.

    [34]See Schott, Tink and Watkins, Political Donations:  Final Report (2014), vol 1 at 110.

    [35]Schott, Tink and Watkins, Political Donations:  Final Report (2014), vol 1; New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel – Political Donations and the Government's Response (2016).

    The Expert Panel Report

21. In May 2014 the New South Wales Government appointed an independent expert panel to consider and report on options for long-term reform of the State's electoral funding laws. The panel delivered a report to government in December 2014 ("the Expert Panel Report"). The Expert Panel Report generally endorsed the key components of the EFED Act, but noted that "it ha[d] become a complicated and unwieldy piece of legislation and this impedes compliance". It recommended the EFED Act be completely rewritten.

22. The Expert Panel Report described the regulation of third-party campaigners as "a challenge".  It stated a belief that third-party campaigners "should be free to participate in election campaigns but they should not be able to drown out the voices of parties and candidates who are the direct electoral contestants".  It noted a long-standing concern of the conservative side of politics in Australia that trade unions provide an unfair advantage to the Labor Party and referred to a high level of concern about the possible emergence of political action committees ("PACs") modelled upon those in the United States of America, which incur very large expenditure and have the potential to undermine the role of parties and candidates in election campaigns.

23. The Expert Panel Report accepted that there is widespread support for third-party participation in elections "within limits".  It supported an approach which caps their expenditure in the same way as for parties and candidates, but was of the view that the current cap is "too high" and suggested it be halved to $500,000 "to guard against third parties coming to dominate election campaigns".  It observed that third-party campaigners had spent far less than the $1 million allowance under their spending cap for the 2011 election.  Whilst the spending cap "should not be set so low as to prevent third parties from having a genuine voice in debate", the report considered $500,000 to be well above the highest sum spent by third-party campaigners in the 2011 election and said that it believed it to be "a sufficient amount that strikes the right balance between the rights of third parties and those of parties and candidates".  Perhaps assuming that its recommendations would be implemented by the 2015 election, the panel further recommended that the level of third-party spending caps be reviewed after that date "if it becomes apparent that they are causing concern".  In fact, the caps remained the same for the capped expenditure period relevant to that election and the expenditure of third-party campaigners such as the plaintiffs rose, as outlined earlier in these reasons.

24. There is a statement in the Expert Panel Report which the plaintiffs rely upon as disclosing the real purpose of s 29(10): "[t]he [p]anel strongly agrees that political parties and candidates should have a privileged position in election campaigns [because they] are directly engaged in the electoral [contest] and are the only ones able to form government and be elected to Parliament". It should be added that the report then went on to say: "That said, we also strongly support the principle that third parties should be treated as recognised participants in the electoral process. Third parties have a right to have a voice and attempt to influence voting at elections … However, third parties should not be able to drown out the voice of the political parties."

    The Joint Standing Committee on Electoral Matters report

25. Following the release of the Expert Panel Report, the New South Wales Government indicated its in-principle support for all but one of the Expert Panel Report's 50 final recommendations.  It referred the report and the Government's response to it to the Joint Standing Committee on Electoral Matters ("the JSCEM"), which published a report in June 2016 entitled Inquiry into the Final Report of the Expert Panel – Political Donations and the Government's Response ("the JSCEM Report").

26. The JSCEM Report noted that three unions had spent considerably more than the proposed cap in the period 1 July 2014 to 30 June 2015.  The JSCEM Report endorsed the Expert Panel Report's conclusion that third parties should not be able to run campaigns to the same extent as candidates and parties.  However, noting submissions from constitutional lawyers that the cap must not be set so low that a third-party campaigner cannot reasonably present its case, the JSCEM recommended that before decreasing the cap to $500,000, the New South Wales Government consider whether there was sufficient evidence that a third-party campaigner could reasonably present its case within that expenditure limit.  No material has been placed before the Court which suggests that such an analysis was undertaken.

    The Electoral Funding Bill 2018

27. Speaking of the cap on electoral expenditure applying to third-party campaigners in the Electoral Funding Bill 2018, the relevant Minister advised the New South Wales Legislative Assembly that "[t]he expert panel considered that third party campaigners should have sufficient scope to run campaigns to influence voting at an election – just not to the same extent as parties or candidates.  The proposed caps will allow third party campaigners to reasonably present their case while ensuring that the caps are in proportion to those of parties and candidates who directly contest elections."[36]

    [36]New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 May 2018 at 4.

28. The Minister later said[37] that the panel had recommended the reduction in the cap to $500,000 "to guard against third parties dominating election campaigns".  He said that the JSCEM considered the panel's recommendation and supported reducing the amount of the cap.  He made no reference to the caveat of the JSCEM, namely that enquiries should be made as to what was reasonably required by way of expenditure before the cap was decreased.

    [37]New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 23 May 2018 at 63.

    The real issue?

29. The defendant submits that the real point in dispute between the parties is the amount of the cap which applies to third-party campaigners. So much may be inferred from the fact that the plaintiffs do not contend that there should be no differentiation as between parties, candidates and third-party campaigners so far as concerns capping of electoral expenditure. The scheme of the EFED Act was to differentiate and the plaintiffs accept this as appropriate. The difference in those relativities can be explained on the basis that parties must incur the expenses of mounting a campaign in every electorate on all issues, so their expenditure is much greater than third-party campaigners, who may pick and choose who, what, where and how they seek to influence election outcomes.

30. The Commonwealth, intervening, points to what it describes as an obvious tension between the plaintiffs' argument that the purpose of s 29(10) is illegitimate and their acceptance that the purposes of the EFED Act were not. It is accepted by the plaintiffs that a purpose of the EFED Act was to prevent the drowning out of voices by the distorting influence of money and that it did so in relevant part by differentiating between political parties, candidates and third-party campaigners. That purpose and that treatment has not altered. That differential treatment is properly to be seen as an effect of the pursuit of that purpose. The real issue, the Commonwealth says, is one of justification of the extent of the effect of s 29(10) on the implied freedom, which falls to be determined at step 3 of the approach mandated by Lange.

31. It is correct to observe that the plaintiffs accept as legitimate the purposes of the capping provisions of the EFED Act. The plaintiffs accept that those purposes include ensuring that wealthy voices do not drown out others. They do so by providing something of a level playing field[38].  In McCloy it was held that these purposes not only do not impede the system of representative government provided for by the Constitution; they enhance it[39].

    [38]Australian Capital Television Pty Ltd v The Commonwealth (1992) 177 CLR 106 at 146, 175, 239; [1992] HCA 45 ("ACTV").

    [39]McCloy v New South Wales (2015) 257 CLR 178 at 196 [5].

32. The plaintiffs do not suggest that these purposes are not also those of the EF Act generally. But they argue that s 29(10) has a different or further purpose, namely, to privilege the voices of political parties in State election campaigns over those of third-party campaigners. However, the purposes of s 29(10) of the EF Act must be considered in context. That context includes the scheme and purposes of the EF Act as a whole and it includes the legislative history of the capping provisions, which is to say the EFED Act and its purposes. So understood there may be a real question about whether, as the Commonwealth contends, s 29(10) simply seeks to further those purposes but, in doing so, effects a greater burden on the freedom.

33. There may also be a question whether a new and different purpose for s 29(10) can properly be discerned from opinions stated in the reports to government which preceded it. There may be such a question even though s 34(1) of the Interpretation Act 1987 (NSW) permits "any material not forming part of the Act … [which] is capable of assisting in the ascertainment of the meaning of the provision" to be considered.

34. The statements in the Expert Panel Report must be read in the context of the report as a whole.  It is difficult to read the report as directed to suppressing third-party speech, given its recognition of the importance of it in the electoral process.  The concerns expressed in the report were directed to what might occur in the future, particularly the possibility that US-style PACs might come to dominate campaigns.  It may further be observed that if any differential treatment is an illegitimate purpose in respect of caps on donations or electoral expenditure, the legislature would never be in a position to address the risk to the electoral process posed by such groups, as the Commonwealth points out.

35. These questions concerning the plaintiffs' argument as to the purpose of s 29(10) may be put to one side. The legitimacy of the purpose of s 29(10) may be assumed and attention directed immediately to the issue which is clearly determinative of question 1 of the special case, namely whether the further restrictions which s 29(10) places on the freedom can be said to be reasonably necessary and for that reason justified.

36. Taking an approach of this kind is not to deny that Lange and the cases which followed it require that the issue of compatibility of purpose be addressed before proceeding to determine whether a statutory provision is justified in the burden it places on the freedom[40].  But where a compatible purpose is identified by those contending for the validity of the statutory provision, the Court may proceed upon the assumption that it is the relevant purpose and then consider the issue upon which validity will nevertheless depend.

    [40]Unions NSW [No 1] (2013) 252 CLR 530 at 556 [46]; McCloy v New South Wales (2015) 257 CLR 178 at 203 [31], 231 [130], 284 [320].

37. This was the approach taken in ACTV[41].  In Unions NSW [No 1][42] it was noted that members of the Court in ACTV were prepared to assume that the purposes of the provisions in question were as stated by those contending that the legislative provisions burdening the freedom were justified.  The purposes there contended for were purposes which were legitimate, in the sense later discussed in Lange. So too are the purposes for which the defendant here contends, namely those purposes which had applied to the provisions of the EFED Act.

    [41](1992) 177 CLR 106 at 144, 156-157, 188-189.

    [42](2013) 252 CLR 530 at 557 [49].

38. Nothing said in Lange precludes the approach taken in ACTV.  It is a well-recognised aspect of judicial method to take an argument at its highest where it provides a path to a more efficient resolution of a matter.  It may be otherwise with respect to the implied freedom where no legitimate purpose can be identified, but then that would be the issue most obviously determinative of the case and there would be no need to proceed further.  These reasons therefore proceed on the assumption, favourable to the defendant, that the purpose of the law is to prevent the drowning out of voices by the distorting influence of money.

    Justification – a privileged position?

39. The defendant submits that candidates and political parties occupy a constitutionally distinct position which legitimises the preferential treatment of candidates and political parties relative to others who are not directly seeking to determine who shall be elected to Parliament or form government. The defendant argues that the foundation of the implied freedom is ss 7 and 24 of the Constitution, which require that the Senate and House of Representatives be composed of persons "directly chosen by the people".  It is said that the choice that is protected by the implied freedom is not a choice between ideas, policies, views or beliefs except insofar as such choice may be reflected in the electoral choice between candidates.  Further in this regard, it is said that the "processes of choice by electors to which ss 7 and 24 allude ... encompass legislated processes which facilitate and translate electoral choice in order to determine who is or is not elected as a senator or member of the House of Representatives"[43].  On that basis, the defendant argues that candidates and political parties enjoy special significance as the subjects of the protected electoral choice, which itself justifies their differential treatment.

    [43]Re Nash [No 2] (2017) 92 ALJR 23 at 30 [35]; 350 ALR 204 at 212; [2017] HCA 52.

40. Those submissions should not be accepted. The requirement of ss 7 and 24 of the Constitution that the representatives be "directly chosen by the people" in no way implies that a candidate in the political process occupies some privileged position in the competition to sway the people's vote simply by reason of the fact that he or she seeks to be elected. Indeed, to the contrary, ss 7 and 24 of the Constitution guarantee the political sovereignty of the people of the Commonwealth by ensuring that their choice of elected representatives is a real choice, that is, a choice that is free and well-informed[44].  Because the implied freedom ensures that the people of the Commonwealth enjoy equal participation in the exercise of political sovereignty[45], it is not surprising that there is nothing in the authorities which supports the submission that the Constitution impliedly privileges candidates and parties over the electors as sources of political speech.  Indeed, in ACTV, Deane and Toohey JJ observed that the implied freedom[46]:

    "extends not only to communications by representatives and potential representatives to the people whom they represent.  It extends also to communications from the represented to the representatives and between the represented."

    [44]ACTV (1992) 177 CLR 106 at 138-139; Brown v Tasmania (2017) 261 CLR 328 at 359 [88].

    [45]Unions NSW [No 1] (2013) 252 CLR 530 at 578 [135].

    [46]ACTV (1992) 177 CLR 106 at 174.

    Justification – a reasonable necessity?

41. The provisions in question in ACTV prohibited the broadcasting of political advertisements or information during an election period.  They were held to infringe the implied freedom and to be invalid.  Invalidity resulted because the nature or extent of the restrictions could not be justified[47].  In Lange[48] it was observed that the provisions in question in ACTV were held to be invalid because there were other, less drastic, means by which the objects of the law could have been achieved.  This passage in Lange was referred to in the joint judgment in McCloy[49], where it was explained that if there are other equally effective means available to achieve the statute's legitimate purpose but which impose a lesser burden on the implied freedom, it cannot be said that one which is more restrictive of the freedom is reasonably necessary to achieve that purpose.

    [47]ACTV (1992) 177 CLR 106 at 147, 175, 235.

    [48]Lange v Australian Broadcasting Corporation (1997) 189 CLR 520 at 568.

    [49]McCloy v New South Wales (2015) 257 CLR 178 at 210 [57].

42. It is well understood that an enquiry as to the necessity of a provision which effectively burdens the implied freedom is one of the tests of structured proportionality analysis.  If the provision fails the necessity test, then, on that approach, it will be held invalid[50]. Such a test also mirrors to an extent the enquiry which has been applied to test the validity of legislation which restricts the freedom guaranteed by s 92 of the Constitution, as was observed in McCloy[51].  In Unions NSW [No 1][52], reference was made to the most recent of these cases:  Betfair Pty Ltd v Western Australia[53].  In that case it was not doubted that the provisions in question, which restricted interstate betting on horse races, addressed perceived problems relating to the integrity of the racing industry in Western Australia.  The legislation was held to be invalid because a complete prohibition was not necessary to achieve its objects.  This was made evident by legislation adopted in another State which was directed to achieving the same purpose but effected a much lesser burden on the freedom[54].  A similar approach was taken to existing legislative measures in the joint judgment in Brown v Tasmania[55].

    [50]McCloy v New South Wales (2015) 257 CLR 178 at 194 [2(B)].

    [51]McCloy v New South Wales (2015) 257 CLR 178 at 210 [57].

    [52](2013) 252 CLR 530 at 556-557 [48].

    [53](2008) 234 CLR 418; [2008] HCA 11.

    [54]Betfair Pty Ltd v Western Australia (2008) 234 CLR 418 at 468-469 [64], 479 [110].

    [55](2017) 261 CLR 328.

43. In an earlier case concerning s 92, North Eastern Dairy Co Ltd v Dairy Industry Authority of NSW[56], Mason J said that the regulation of the milk trade was not shown to be the "only practical and reasonable mode" of regulation which could achieve the law's stated objective of ensuring high-quality milk and the protection of public health.  In Betfair, that view was accepted as "the doctrine of the Court"[57].  That doctrine was held to be consistent with the explanation given in Cole v Whitfield[58] of the justification of the total prohibition of the sale of undersized crayfish in Tasmania, irrespective of origin, namely that it was a "necessary means" of enforcing the prohibition on catching undersized fish in Tasmania because inspections necessary for that purpose were not practicable.

    [56](1975) 134 CLR 559 at 616; [1975] HCA 45.

    [57]Betfair Pty Ltd v Western Australia (2008) 234 CLR 418 at 477 [103].

    [58](1988) 165 CLR 360; [1988] HCA 18.

44. The defendant submits that the sum of $500,000 which may be expended by third parties in campaigning is a substantial sum.  Pressed as to how it could be said to be sufficient, given in particular that the further research recommended by the JSCEM as to what is reasonably required by third-party campaigners appears not to have been undertaken, the defendant responded that Parliament does not need to provide evidence for the legislation it enacts.  It is entitled to make the choice as to what level of restriction is necessary to meet future problems.

45. It must of course be accepted that Parliament does not generally need to provide evidence to prove the basis for legislation which it enacts.  However, its position in respect of legislation which burdens the implied freedom is otherwise.  Lange requires that any effective burden be justified[59].  As the Commonwealth conceded in argument, the Parliament may have choices but they have to be justifiable choices where the implied freedom is concerned.

    [59]McCloy v New South Wales (2015) 257 CLR 178 at 213-214 [68]-[69]; Brown v Tasmania (2017) 261 CLR 328 at 359 [88], 361 [92].

46. The defendant seeks to mark out an area within which it might make a choice and which might not be subject to a requirement of justification.  It submits that the choice it made, to reduce the third-party campaigners' cap to $500,000, lies within the domain of its choice.

47. The phrase "domain of the legislative discretion" appears in Professor Barak's text[60].  The joint judgment in McCloy[61] referred to this concept as the legislature's "domain of selections", in a discussion of the respective roles of the Court and of the Parliament in the context of the question of necessity.  It was there said that that question does not deny that it is the role of the Parliament 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.  The domain of selections open to the Parliament was described as comprising those provisions which fulfil the legislative purpose with the least harm to the implied freedom.  And as the Commonwealth pointed out in argument, there may be a multitude of options available to the Parliament in selecting the desired means.

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

    [61]McCloy v New South Wales (2015) 257 CLR 178 at 217 [82].

48. The defendant's submission that the decision concerning the level of capping of electoral expenditure is reserved to the Parliament and not subject to scrutiny by the Court may be understood to imply a requirement of some kind of deference to Parliament on the part of the Court or a "margin of appreciation".  It may derive some support from what was said by the majority in Harper v Canada (Attorney General)[62].

    [62][2004] 1 SCR 827.

49. The legislation in question in Harper contained provisions which imposed caps on spending by third parties on election advertising in a manner similar to the EFED Act and the EF Act. The provisions were very restrictive. Third parties were limited to expenditure of $3,000 in a given electoral district or $150,000 nationally.

50. Neither the majority nor the minority in Harper doubted that the purposes for restricting expenditure of this kind could be legitimate.  Statements by the majority as to those proper purposes, such as preventing the drowning out of voices and enhancing the electoral process, were referred to in McCloy[63] with respect to the EFED Act. However, no reference was made in McCloy to the decision arrived at by the majority in Harper as to the validity of the provisions, or to the reasons given by McLachlin CJ, Major and Binnie JJ in their Honours' strong dissent.

    [63]McCloy v New South Wales (2015) 257 CLR 178 at 207 [44].

51. The majority in Harper concluded that the restrictions affecting third parties were valid.  At one point in their reasons the majority pointed to a number of contextual factors which, it was said, "favour a deferential approach to Parliament" in determining whether the third-party advertising expense limits were demonstrably justified[64].  The minority likewise accorded "a healthy measure of deference"[65] to Parliament, although their Honours came to a different conclusion.  No statements of the kind made in Harper are to be found in decisions of this Court since Lange respecting the implied freedom.  Indeed it has been observed that deference would seem not to be appropriate given this Court's role in relation to the freedom and a margin of appreciation therefore cannot apply[66].

    [64]Harper v Canada (Attorney General) [2004] 1 SCR 827 at 879 [88].

    [65]Harper v Canada (Attorney General) [2004] 1 SCR 827 at 849 [39].

    [66]Unions NSW [No 1] (2013) 252 CLR 530 at 553 [34], 556 [45]; McCloy v New South Wales (2015) 257 CLR 178 at 220 [90]-[91].

52. There were other differences of view as between the majority and minority in Harper, including as to whether the effect of the legislation was to prevent effective communication and as to the evidence on that question.  The real question in the case, the minority said[67], was whether the limits effected by the statute on free political expression go too far.  That question was answered in large part by an enquiry as to whether the legislation infringes the right to free expression provided by the Canadian Charter of Rights and Freedoms in a way that is "measured and carefully tailored" to the goals sought to be achieved[68].  The test of "minimal impairment" established by prior Canadian authority requires that the rights be impaired no more than is necessary[69].  An analogy with a requirement of reasonable necessity is evident.  The restrictions in Harper were considered by the minority to be severe.  Critically, from their Honours' perspective, the Attorney-General had not demonstrated that limits so severe were required to meet perceived dangers such as inequality[70].

    [67]Harper v Canada (Attorney General) [2004] 1 SCR 827 at 846 [31].

    [68]Harper v Canada (Attorney General) [2004] 1 SCR 827 at 846 [32].

    [69]Harper v Canada (Attorney General) [2004] 1 SCR 827 at 846-847 [32].

    [70]Harper v Canada (Attorney General) [2004] 1 SCR 827 at 849 [38].

53. The same conclusion is compelling with respect to s 29(10). As the plaintiffs point out, no basis was given in the Expert Panel Report for a halving of the figure previously allowed for third-party campaigning expenses. It may have been thought to be a reasonable allowance given the level of expenditure by third-party campaigners at the 2011 election. The report recommended that the figure be checked against expenditure for the 2015 election. If that enquiry had been undertaken, a different conclusion might have been reached. And despite the recommendation of the JSCEM, no enquiry as to what in fact is necessary to enable third-party campaigners reasonably to communicate their messages appears to have been undertaken. The defendant has not justified the burden on the implied freedom of halving the cap in s 29(10) as necessary to prevent the drowning out of voices other than those of third-party campaigners. The plaintiffs' submissions in this regard should be accepted. Section 29(10) is invalid.

    Question 2

54. Because the answer to question 1 is "yes", there is no cap upon which s 35 of the EF Act operates. The defendant invited the Court nevertheless to answer question 2 because some provision might be made in the remainder of the capped State expenditure period to replace that cap. That is an invitation to speculate. It is not necessary to answer the question.

    Applications to intervene

55. The University of New South Wales Grand Challenge on Inequality ("the UNSW GCI") sought leave, as amicus curiae, to be heard and to adduce evidence as to constitutional facts.  Those facts did not form part of the special case agreed by the parties.  The Liberal Party of Australia (NSW Division) ("the NSW Liberal Party") sought leave to intervene in support of the defendant.  Both applications were refused by the Court in advance of the hearing.

56. It cannot be doubted that there are occasions when the Court is assisted by the submissions of a person or body not a party to the proceedings or having a right to intervene.  It may be assisted most obviously when there is no contradictor or the parties do not present argument on an issue which the Court considers necessary to be determined.  It may be otherwise where the parties have fully canvassed all relevant issues.  This observation is apposite to the NSW Liberal Party's application for intervention.  The issues raised by the special case were comprehensively dealt with by the parties and the Commonwealth and the States which intervened.  There was no basis for the NSW Liberal Party's application.

57. So far as concerns the application by the UNSW GCI it is possible that in a particular case additional constitutional facts may provide a wider perspective and facilitate the Court's determination of constitutional issues.  It is to be expected that this will occur only rarely and that the Court will be cautious about what would amount to an expansion of a case agreed by the parties by permitting an intrusion of new facts or issues.  There was no warrant for adding to the case in the manner suggested by the UNSW GCI.

    Answers

58. The questions stated by the parties for the opinion of the Full Court should be answered as follows: 

    Question 1:               Yes.

    Question 2:               Unnecessary to answer.

    Question 3:               The defendant.

59. GAGELER J.   Forty years before the first articulation of the constitutionally implied freedom of political communication in Nationwide News Pty Ltd v Wills[71] and Australian Capital Television Pty Ltd v The Commonwealth ("ACTV")[72], a law purporting to dissolve the Australian Communist Party and to authorise banning by Commonwealth Executive order of incorporated or unincorporated associations professing similar ideology was held to exceed the legislative power of the Commonwealth Parliament in Australian Communist Party v The Commonwealth ("the Communist Party Case")[73].  

    [71](1992) 177 CLR 1; [1992] HCA 46.

    [72](1992) 177 CLR 106; [1992] HCA 45.

    [73](1951) 83 CLR 1; [1951] HCA 5.

60. An argument rejected in the Communist Party Case was that the prohibition of any organisation solemnly determined by the Commonwealth Parliament to be subversive of the Constitution is within the power conferred on the Commonwealth Parliament by s 51(xxxix) to make laws with respect to matters incidental to the execution and maintenance of the Constitution vested in the Commonwealth Executive by s 61.  The response of Dixon J to that argument was one of theory informed by experience[74]:

    "History and not only ancient history, shows that in countries where democratic institutions have been unconstitutionally superseded, it has been done not seldom by those holding the executive power.  Forms of government may need protection from dangers likely to arise from within the institutions to be protected.  In point of constitutional theory the power to legislate for the protection of an existing form of government ought not to be based on a conception, if otherwise adequate, adequate only to assist those holding power to resist or suppress obstruction or opposition or attempts to displace them or the form of government they defend."

    [74](1951) 83 CLR 1 at 187-188.

61. Of the limits of the power of the Commonwealth Parliament to make laws with respect to matters incidental to the execution and maintenance of the Constitution, Dixon J went on to say[75]:

    "The power is ancillary or incidental to sustaining and carrying on government. Moreover, it is government under the Constitution and that is an instrument framed in accordance with many traditional conceptions, to some of which it gives effect, as, for example, in separating the judicial power from other functions of government, others of which are simply assumed. Among these I think that it may fairly be said that the rule of law forms an assumption. In such a system I think that it would be impossible to say of a law of the character described, which depends for its supposed connection with the power upon the conclusion of the legislature concerning the doings and the designs of the bodies or person to be affected and affords no objective test of the applicability of the power, that it is a law upon a matter incidental to the execution and maintenance of the Constitution and the laws of the Commonwealth."

    [75](1951) 83 CLR 1 at 193.

62. Dixon J's observation that the rule of law was assumed in the framing of the Constitution corresponded with Fullagar J's observation that "in our system the principle of Marbury v Madison is accepted as axiomatic, modified in varying degree in various cases (but never excluded) by the respect which the judicial organ must accord to opinions of the legislative and executive organs"[76].  Conformably with that principle, which itself is no more than an application of the rule of law to a system in which a written constitution has the status of a higher law, "[i]t is the courts, rather than the legislature itself, which have the function of finally deciding whether an Act is or is not within power"[77].

    [76](1951) 83 CLR 1 at 262-263 (citation omitted).

    [77]Attorney-General (WA) v Marquet (2003) 217 CLR 545 at 570 [66]; [2003] HCA 67.

63. The Communist Party Case bears on the implied freedom of political communication in a number of respects relevant to the resolution of issues raised in the present case.  First, it provides a stark illustration of a purpose – to "assist those holding power to resist or suppress obstruction or opposition or attempts to displace them or the form of government they defend" – legislative adoption of which is not legitimate in the sense that the purpose is not compatible with maintenance of the constitutionally prescribed system of representative and responsible government. 

64. Second, the Communist Party Case forms part of the historical background to the reason given by Mason CJ in ACTV for why the High Court "should be astute not to accept at face value claims by the legislature and the Executive that freedom of communication will, unless curtailed, bring about corruption and distortion of the political process".  Mason CJ said[78]:

    "Experience has demonstrated on so many occasions in the past that, although freedom of communication may have some detrimental consequences for society, the manifest benefits it brings to an open society generally outweigh the detriments.  All too often attempts to restrict the freedom in the name of some imagined necessity have tended to stifle public discussion and criticism of government."

    [78](1992) 177 CLR 106 at 145.

65. Mason CJ referred to the need for the Court to "scrutinize with scrupulous care" a legislative restriction on political communication in order to ensure that the restriction is "no more than is reasonably necessary to achieve the protection of the competing public interest which is invoked to justify the burden on communication"[79].  Gleeson CJ later explained in Mulholland v Australian Electoral Commission ("Mulholland")[80] that "reasonably necessary" in that formulation is not to be taken to mean "unavoidable or essential" but "to involve close scrutiny, congruent with a search for 'compelling justification'".  That, his Honour held, was the level of scrutiny and the corresponding standard of justification applicable to a Commonwealth legislative restriction on political communication in the conduct of an election for Commonwealth political office[81].

    [79](1992) 177 CLR 106 at 143-144.

    [80](2004) 220 CLR 181 at 200 [40]; [2004] HCA 41.

    [81](2004) 220 CLR 181 at 200-201 [40]-[41].

66. Contrary to an argument advanced on behalf of the Attorney‑General for South Australia intervening in the present case, the level of scrutiny and the corresponding standard of justification applicable to a State legislative restriction on political communication in the conduct of an election for State political office can be no less onerous than those applicable to a Commonwealth legislative restriction on political communication in the conduct of an election for Commonwealth political office.  The same level of scrutiny and the same standard of justification are warranted because the risk to maintenance of the system of representative and responsible government established by Chs I and II of the Constitution that inheres in the representative character of a State Parliament is of the same nature as the risk to maintenance of that system that inheres in the representative character of the Commonwealth Parliament.  The risk arises from the propensity of an elected majority to undervalue, and, at worst, to seek to protect itself against adverse electoral consequences resulting from, political communication by a dissenting minority[82].

    [82]McCloy v New South Wales (2015) 257 CLR 178 at 227-228 [114]-[117], 265 [245]; [2015] HCA 34.

67. Third, the Communist Party Case is authority for a specific principle of constitutional adjudication, amounting to an application of the more general principle in Marbury v Madison[83], which bears directly on the Court's determination of whether legislation burdening political communication meets the requisite standard of justification.  The specific principle of constitutional adjudication, as expounded by Williams J, is that "it is the duty of the Court in every constitutional case to be satisfied of every fact the existence of which is necessary in law to provide a constitutional basis for the legislation"[84].  That principle is ultimately determinative in the present case.

    [83](1803) 5 US 137.

    [84](1951) 83 CLR 1 at 222. See Hughes and Vale Pty Ltd v New South Wales [No 2] (1955) 93 CLR 127 at 165; [1955] HCA 28; Commonwealth Freighters Pty Ltd v Sneddon (1959) 102 CLR 280 at 307; [1959] HCA 11.

68. Agreeing that the questions reserved for the consideration of the Full Court should be answered as proposed by Kiefel CJ, Bell and Keane JJ, I set out my own reasoning on two issues. One concerns the identification and legitimacy of the purposes of s 29(10) of the Electoral Funding Act 2018 (NSW) ("the EF Act"). The other concerns the absence of justification for the amount of the cap which s 29(10) imposes on electoral expenditure incurred by a third-party campaigner during the capped State expenditure period for a State election.

    Legitimacy of purposes

69. The stated objects of the EF Act are materially identical to those of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) ("the EFED Act"), provisions of which were considered in Unions NSW v New South Wales[85] and McCloy v New South Wales ("McCloy")[86].  The stated objects include "to establish a fair and transparent electoral funding, expenditure and disclosure scheme" and "to help prevent corruption and undue influence in the government of the State"[87].

    [85](2013) 232 CLR 530; [2013] HCA 58.

    [86](2015) 257 CLR 178.

    [87]Section 3(a) and (c) of the EF Act. See also s 4A(a) and (c) of the EFED Act.

70. The purposes of s 29(10) of the EF Act are argued by the State of New South Wales to fall squarely within those stated objects. The State emphasises that the cap on the electoral expenditure of third-party campaigners is one element of an overall scheme which also provides for caps on electoral expenditure by candidates for election, groups of candidates and political parties endorsing candidates for election[88] as well as for caps on political donations[89]. 

    [88]Division 4 of Pt 3 of the EF Act.

    [89]Division 3 of Pt 3 of the EF Act.

71. Capping electoral expenditure by third-party campaigners, the State argues, serves two complementary purposes.  It increases fairness, by preventing a well-funded source of information or opinion from being able to dominate and distort political discourse during an election period[90].  And it reduces the risk of corruption or undue influence in the government of the State which can arise from elected office holders finding themselves beholden to those whose funding, or whose withholding of funding, contributed to the office holders' electoral success[91].

    [90]cf McCloy (2015) 257 CLR 178 at 207 [45], 248 [182].

    [91]McCloy (2015) 257 CLR 178 at 204-205 [36], 248 [181].

72. The plaintiffs do not dispute that the legislative purposes which the State asserts are compatible with maintenance of the constitutionally prescribed system of representative and responsible government. The plaintiffs do not dispute that a cap on electoral expenditure by third-party campaigners can have those purposes. Indeed, the plaintiffs do not dispute that the cap on electoral expenditure by third-party campaigners formerly imposed under the EFED Act was properly explained as having those purposes and was reasonably appropriate and adapted to advance those purposes in a manner compatible with maintenance of the constitutionally prescribed system of representative and responsible government.

73. The plaintiffs' argument is that in the parliamentary processes which resulted in the replacement of the cap on electoral expenditure by third-party campaigners under the EFED Act with the cap on electoral expenditure by third-party campaigners under the EF Act, an additional and nefarious legislative purpose intruded. The additional and nefarious legislative purpose is said to be that of "marginalising" the contribution of third-party campaigners to political discourse during an election period and correspondingly of "privileging" the contribution of candidates and parties. This purpose is said to inhere in a legislative design which seeks to ensure that the contribution of a third-party campaigner to political discourse will not be so large as to be capable of determining the result of an election.

74. To support the inference of an intrusion of such an additional and nefarious legislative purpose into the design of the EF Act, the plaintiffs point to the equation under the EFED Act of the cap on electoral expenditure for a third-party campaigner with the cap on electoral expenditure for both a party endorsing candidates for election to the Legislative Council and a group of candidates not endorsed by any party for election to the Legislative Council[92]. The plaintiffs point to the relativity under the EFED Act between the amount of those caps on electoral expenditure and the amount of the cap on electoral expenditure for a party endorsing candidates for all electoral districts of the Legislative Assembly. As initially imposed by the EFED Act in 2011, those amounts were, respectively, $1,050,000[93] and $9,300,000[94], the former amount being a little more than 11 per cent of the latter. The EF Act maintains the same real value of, and essentially the same relativity between, the amounts of the caps on electoral expenditure for a party endorsing candidates only for the Legislative Council and a group of candidates for the Legislative Council, both of which are set at $1,288,500[95], and the amount of the cap on electoral expenditure for a party endorsing candidates for all electoral districts of the Legislative Assembly, which is set at $11,429,700[96].

    [92]Section 95F(4)-(5), (10)(a) of the EFED Act.

    [93]Section 95F(4)-(5) read with s 95F(14) and Sch 1, cl 3 of the EFED Act.

    [94]Section 95F(2)-(3) read with s 95F(14) and Sch 1, cl 3 of the EFED Act.

    [95]Section 29(4)-(5) of the EF Act.

    [96]Section 29(2)-(3) of the EF Act.

75. The plaintiffs contrast the retention of that status quo with the reduction under the EF Act of the cap on electoral expenditure for a third-party campaigner to $500,000 (a reduction in real terms of a little more than 60 per cent from the previous cap of $1,050,000, as adjusted for inflation, under the EFED Act[97]), the effect of which is to reduce the maximum electoral expenditure available to a third-party campaigner to less than five per cent of the maximum electoral expenditure available to a major party.

    [97]See Election Funding, Expenditure and Disclosures (Adjustable Amounts) Amendment Notice 2015 (NSW), Sch 1 [8].

76. The plaintiffs also rely on the reasons given in the Final Report of the Panel of Experts on Political Donations in New South Wales in 2014 for the Panel's recommendations that "the cap on electoral expenditure by third-party campaigners be decreased to $500,000"[98] and that "a third-party campaigner be prohibited from acting in concert with others to incur electoral expenditure that exceeds the third-party campaigner's expenditure cap"[99]. The plaintiffs point out that the Special Minister of State, when sponsoring the Bill for the EF Act in 2018 in the Legislative Assembly, identified implementation of the first of those recommendations as the sole basis for the choice of the amount which came to be specified in s 29(10)[100]. 

    [98]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 14, 113 (Recommendation 31).

    [99]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 14, 116 (Recommendation 32(c)).

    [100]New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 May 2018 at 4.

77. The Panel prepared its Final Report following consultations which it described as having revealed "a high level of concern about the increase in third-party campaigning" and alarm at "the prospect of New South Wales following the lead of the United States, where Political Action Committees have come to dominate election campaigns"[101].  The Panel referred to a recent academic study indicating that in Australia, as elsewhere, "third-party advertising appears to be on the increase, in both the frequency and size of campaigns"[102].  The Panel agreed with the proposition put to it in submissions by one of the authors of that study to the effect that "political parties and candidates should have a privileged position in election campaigns" for the reason that political parties and candidates alone are directly engaged in the electoral contest and that they alone are able to be elected to Parliament and to form government[103].  The Panel also agreed with the proposition that third parties "should be treated as recognised participants in the electoral process" but that third parties "should not be able to drown out the voice of the political parties"[104].  The Panel expressed concern that "a lack of appropriate third-party regulation would work against reformist governments pursuing difficult and controversial issues in the public interest"[105].  Noting that electoral expenditure by a third party at the then most recent State election, in 2011, had not exceeded $400,000, and recording that it would be appropriate to review the level of third-party expenditure caps after the 2015 State election, the Panel took the view that $500,000 was "a sufficient amount that strikes the right balance between the rights of third parties and those of parties and candidates"[106]. The Panel also recommended that the aggregation of third-party expenditure be prohibited, by a provision along the lines of that which came to be enacted as s 35 of the EF Act, as a means of preventing third-party campaigners "from launching a coordinated campaign with a combined expenditure cap that would completely overwhelm parties, candidates and other third parties acting alone"[107].

    [101]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 8, 108.

    [102]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 108, quoting Orr and Gauja, "Third-Party Campaigning and Issue-Advertising in Australia" (2014) 60 Australian Journal of Politics and History 73 at 74.

    [103]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 108-109.

    [104]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 109.

    [105]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 110.

    [106]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 112.

    [107]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 116.

78. Finally, the plaintiffs point to the apparent failure of the New South Wales Government, before introduction of the Bill for the EF Act in 2018, to act on the recommendation of the Joint Standing Committee on Electoral Matters in 2016 "that, before decreasing the cap on electoral expenditure by third-party campaigners to $500,000 ... the NSW Government considers whether there is sufficient evidence that a third-party campaigner could reasonably present its case within this expenditure limit"[108].  That is despite evidence having been publicly available from 2016 of Unions NSW, the Electrical Trades Union of Australia, New South Wales Branch and the New South Wales Nurses and Midwives' Association, as third-party campaigners, each having in fact incurred electoral expenditure in excess of $500,000 during the capped expenditure period for the 2015 State election.

    [108]Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel – Political Donations and the Government's Response (2016) at ix, 49 (Recommendation 7).

79. Where, as here, legislation includes an express statement of statutory objects, identification of legislative purpose must start with the objects so stated, and as illuminated, to the extent their expression might be obscure or ambiguous, by the statutory context.  In the face of an express statement of statutory objects, an additional object that is not only unexpressed but also constitutionally impermissible should not lightly be inferred.

80. In the legislative history on which the plaintiffs rely, there is no smoking gun.  The agreement of the Panel of Experts on Political Donations in New South Wales with the proposition that "political parties and candidates should have a privileged position in election campaigns" cannot be divorced from its agreement with the proposition that third parties "should not be able to drown out the voice of the political parties"[109]. The apparent failure of the New South Wales Government to act on the recommendation of the Joint Standing Committee on Electoral Matters is as consistent with oversight as it is with deliberate inattention. And the cap on the electoral expenditure of a third-party campaigner imposed by s 29(10) of the EF Act cannot be said to have been set at an amount that is obviously so low in absolute or relative terms that the cap is incapable of being explained as a legislative attempt to promote the statutory objects expressed in the EF Act in the manner propounded by the State.

    [109]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 109.

81. Quite apart from the strength or weakness of the indications on which the plaintiffs rely, however, the plaintiffs' attempt to have the Court take the extraordinary step of accepting that s 29(10) of the EF Act (and, with it, s 35 of the EF Act) has an unexpressed and constitutionally impermissible purpose encounters two interrelated difficulties concerning the manner in which the plaintiffs seek to identify that purpose.

82. One difficulty is that the plaintiffs fail to engage with the substantive and inherently fact-dependent dimension of the stated object of the EF Act to establish a scheme of expenditure that is "fair". The notion of fairness referred to in that statement is that captured in the reference by the majority of the Supreme Court of Canada in Harper v Canada (Attorney General)[110] to the creation of a "level playing field for those who wish to engage in the electoral discourse" which in turn "enables voters to be better informed; no one voice is overwhelmed by another".  Within a field of institutional design in which metaphors abound and often clash, the notion of fairness is more akin to that of a "public square meeting" in which all points of view get to be aired than that of an unregulated "marketplace of ideas" in which the purveyor who can afford the largest megaphone gets to drown out his or her competitors[111].

    [110][2004] 1 SCR 827 at 868 [62].

    [111]Tham, Money and Politics:  The Democracy We Can't Afford (2010) at 17, referring to Fiss, The Irony of Free Speech (1996) at 4.

83. The legislative purpose of promoting such substantive fairness amongst those wishing to engage in the electoral discourse was accepted in McCloy to be compatible with the constitutionally prescribed system of representative and responsible government[112].  The point, crisply put in the written submissions of the Attorney-General of the Commonwealth, is that it is permissible within our constitutional system "to restrict certain voices – those that may otherwise dominate the debate – to make room for all to be heard and thereby ensure that electoral choice is as fully informed as possible".

    [112](2015) 257 CLR 178 at 207-208 [44]-[47].

84. The more conceptual and more fundamental difficulty is that the illegitimate legislative purpose sought to be identified by the plaintiffs has embedded within it a notion of want of justification.  Informing the asserted illegitimacy of the purpose of "privileging" candidates and parties on the one hand and "marginalising" third-party campaigners on the other hand is an implicit assertion that the "privileging" of one voice and "marginalising" of another is incompatible with maintenance of the constitutionally prescribed system of representative and responsible government.  Yet, stripped of their pejorative connotations, "privileging" and "marginalising" refer to nothing more than differential treatment and unequal outcomes.  Once it is recognised that "differential treatment and unequal outcomes may be the product of a legislative distinction which is appropriate and adapted to the attainment of a proper objective"[113], it becomes apparent that the compatibility of the "privileging" and "marginalising" of which the plaintiffs complain with maintenance of the constitutionally prescribed system of representative and responsible government cannot be determined without further analysis.

    [113]Mulholland (2004) 220 CLR 181 at 234 [147].

85. Unlike the Commonwealth electoral legislation held to infringe the implied freedom of political communication in ACTV, there is no suggestion that the EF Act is "weighted in favour of the established political parties represented in the legislature immediately before the election" as against "new and independent candidates"[114]. There is no suggestion of abuse of incumbency. The differential treatment of which the plaintiffs complain is rather between all "candidates" and "parties" as defined in the EF Act, on the one hand, and all "third-party campaigners" as defined in the EF Act, on the other hand.

    [114](1992) 177 CLR 106 at 146.

86. According to the definitions in the EF Act, a "candidate" is any person who has nominated as a candidate for election to the Legislative Assembly or the Legislative Council, a "party" is "a body or organisation, incorporated or unincorporated, having as one of its objects or activities the promotion of the election to Parliament ... of a candidate or candidates endorsed by it or by a body or organisation of which it forms a part", and a "third-party campaigner" is "a person or another entity (not being an associated entity, party, elected member, group or candidate) who incurs electoral expenditure for a State election during a capped State expenditure period that exceeds $2,000 in total"[115].  "Electoral expenditure" is "expenditure for or in connection with promoting or opposing, directly or indirectly, a party or the election of a candidate or candidates or for the purpose of influencing, directly or indirectly, the voting at an election"[116] but "does not include expenditure incurred by an entity or other person (not being a party, an associated entity, an elected member, a group or a candidate) if the expenditure is not incurred for the dominant purpose of promoting or opposing a party or the election of a candidate or candidates or influencing the voting at an election"[117].  For a periodic general election, the "capped State expenditure period" is the period from "1 October in the year before which the election is to be held to the end of the election day"[118], being the fourth Saturday in March following the expiry of the previous Legislative Assembly[119].

    [115]Section 4 of the EF Act.

    [116]Section 7(1) of the EF Act.

    [117]Section 7(3) of the EF Act.

    [118]Section 27(a) of the EF Act.

    [119]Sections 24(1) and 24A(a) of the Constitution Act 1902 (NSW).

87. On no conceivable basis could it be suggested that participation of candidates and political parties in election campaigns and endorsement of candidates by political parties is incompatible with maintenance of the constitutionally prescribed system of representative and responsible government.  Candidates for election are integral to the very notion of electoral choice which underlies the very concept of representative government, alignment of candidates for election to political parties has been a feature of the experience of representative and responsible government in Australia from the 1890s to the present[120], and the fact that a successful candidate may have been publicly recognised by a particular political party as being an endorsed candidate of that party and may have publicly represented himself or herself to be such a candidate has been expressly recognised in the manner which has been prescribed by s 15 of the Constitution for the filling of casual vacancies in the Senate since 1977[121].  The reasoning of Gleeson CJ and of Kirby J in Mulholland[122] illustrates how differences between candidates who are endorsed by registered political parties and those who are not can justify, consistently with the implied freedom of political communication, differences in the provision of electoral information to voters.

    [120]See Jaensch, Power Politics:  Australia's Party System, 3rd ed (1994) at 18-37.

    [121]Constitution Alteration (Senate Casual Vacancies) 1977 (Cth).

    [122](2004) 220 CLR 181 at 201 [41], 271-273 [264]-[267].

88. Given that the plaintiffs accept the legitimacy of the cap on electoral expenditure by third-party campaigners that was formerly imposed under the EFED Act, it is plain that it is no part of the plaintiffs' argument to dispute that differences between candidates and political parties on the one hand and third-party campaigners on the other hand can legitimately lead to very substantial variations in the caps on electoral expenditure applicable to each. There is a need to be clear about what those differences are, in order to be clear about how those differences have the potential to explain differential treatment and differential outcomes in the ultimate pursuit of substantive fairness.

89. Professor Crisp long ago explained the "crucial distinction" between political parties and "interest-groups" of the kind which might now meet the definition of third-party campaigners in the EF Act as lying "in the different purpose of their respective commitments to political activity and the different directions that their activities take"[123].  The functional distinction important for present purposes is that, during a period leading up to an election, a political party which aims to form government must be in a position to communicate on the whole range of issues of potential concern to voters whereas a third-party campaigner can concentrate its resources on a single issue of concern to it.  To be equipped not only to communicate on a range of issues but also to respond meaningfully to third-party campaigners, the political party needs to be able to marshal greater resources.

    [123]Crisp, Australian National Government, 5th ed (1983) at 163.

90. Once it is accepted that it is a legitimate legislative purpose to promote a level playing field for all participants in political discourse during an election period, it becomes obvious that the functional distinction between a political party which aims to form government and a third-party campaigner justifies a substantial variation between the amount of the cap imposed on the electoral expenditure of that political party and the amount of the cap imposed on the electoral expenditure of a third-party campaigner.  To ensure that the political party is able to communicate on the range of issues of potential concern to voters without being overwhelmed by the targeted campaigns of any number of third-party campaigners acting alone or in concert, the cap on the third-party campaigner must be substantially lower than the cap on the political party.

91. No doubt, it might be said of any substantial variation between the amount of the cap applicable to candidates or political parties and the amount of the cap applicable to third-party campaigners, imposed in the ostensible pursuit of the objective of substantive fairness, that a purpose of the variation is to "privilege" candidates and parties and to "marginalise" third-party campaigners.  The point is that those labels have no constitutional significance if the amount of each cap can be justified on the basis that each amount is reasonably appropriate and adapted to advance the objective of substantive fairness in a manner compatible with maintenance of the constitutionally prescribed system of representative and responsible government.

179. There is, however, an essential distinction between a law that has the effect of "different treatment" by the quietening or silencing of some, even an effect that is a necessary step to achieving a legitimate purpose, and a law that has a purpose of the same different treatment by the quietening or silencing of some.  Many laws have a justified effect of burdening the freedom of political communication but this does not mean that further analysis is needed before concluding that a law that has the purpose of burdening the freedom is illegitimate.  In short, it is an error to conflate purpose with effect by reasoning that because an effect of quietening or silencing some might be justified, therefore a purpose of quietening or silencing some can be legitimate.

180. The defendant, with the support of the Attorney-General of the Commonwealth, met this issue head-on.  The defendant submitted that a purpose of different treatment could be legitimate, arguing that "the constitutionally distinct position of candidates legitimises the pursuit of legislative objectives that select candidates and political parties for distinctive treatment relative to others who are not directly engaged in the electoral contest and who cannot be elected to Parliament or form government".  That submission cannot be accepted.

181. In Australian Capital Television Pty Ltd v The Commonwealth[268], Mason CJ said that one reason why freedom of political communication was indispensable to a system of representative and responsible government was that "[o]nly by exercising that freedom can the citizen criticize government decisions and actions, seek to bring about change, call for action where none has been taken and in this way influence the elected representatives".  Similarly, Deane and Toohey JJ said that the implied freedom extends not merely to communications by candidates and political parties but also to "communications from the represented to the representatives and between the represented"[269].  A law will have the goal of undermining that freedom if its purpose is to silence the voices of part of the citizenry, not merely as a necessary step towards or consequence of achieving some other purpose, but for the very reason of ensuring that the position of some is suppressed relative to others.

     Illegitimate purpose revealed by the meaning of ss 29(10) and 35 and the parties' pleadings

     [268](1992) 177 CLR 106 at 138. See also Unions NSW v New South Wales (2013) 252 CLR 530 at 548 [17].

     [269](1992) 177 CLR 106 at 174.

     The meaning of ss 29(10) and 35

182. Sections 29(10) and 35 of the Electoral Funding Act are part of a scheme that regulates the electoral expenditure of political parties, candidates for election, and third-party campaigners.  The core of the definition of "electoral expenditure" in s 7(1), subject to exceptions that can be put to one side, encompasses two limbs:  first, expenditure "for or in connection with promoting or opposing, directly or indirectly, a party or the election of a candidate or candidates"; secondly, expenditure "for the purpose of influencing, directly or indirectly, the voting at an election".

183. The relevant provisions in relation to electoral expenditure of third-party campaigners are as follows:

     "29     Applicable caps on electoral expenditure for State election campaigns

     (1)General

     The applicable caps on electoral expenditure for a State election campaign are as provided by this section, as modified by section 30 (Aggregation of applicable caps – State election campaigns).

     ...

     (10)Third-party campaigners

     For a State general election, the applicable cap for a third‑party campaigner is:

     (a)$500,000 if the third-party campaigner was registered under this Act before the commencement of the capped State expenditure period for the election, or

     (b)$250,000 in any other case.

     ...

     35Limit on electoral expenditure – third-party campaigner acting in concert with others

     (1)It is unlawful for a third-party campaigner to act in concert with another person or other persons to incur electoral expenditure in relation to an election campaign during the capped expenditure period for the election that exceeds the applicable cap for the third-party campaigner for the election.

     (2)In this section, a person acts in concert with another person if the person acts under an agreement (whether formal or informal) with the other person to campaign with the object, or principal object, of:

     (a)having a particular party, elected member or candidate elected, or

     (b)opposing the election of a particular party, elected member or candidate."

184. Section 33(1), read with s 143(1), makes it unlawful for third-party campaigners to exceed the expenditure cap and renders such conduct an offence with a maximum penalty of 400 penalty units or imprisonment for two years or both.

185. As the defendant submitted, s 35(1) does not prohibit all agreements to incur electoral expenditure that exceeds the third-party campaigner's cap during the capped period of the election. This is because the proscribed sole object, or proscribed principal object, does not include the second limb of the definition of electoral expenditure, namely the object of "influencing, directly or indirectly, the voting at an election". Nevertheless, it is likely that there will be few clear cases where a third-party campaigner could be confident that electoral expenditure is (i) incurred for the purpose of influencing voting at an election, but (ii) outside s 35(1) because it is not incurred with a principal object of supporting or opposing the election of a person or party.

186. Contrary to the submissions of the defendant, s 35 is not merely a general anti-avoidance provision. The Electoral Funding Act contains a general anti‑avoidance provision in s 144 which includes a prohibition on schemes to circumvent electoral expenditure restrictions.  Section 30 is another example of an anti-avoidance provision that strictly proscribes contrivances that would have the effect of circumventing the caps on parties and elected members.  For instance, s 30(4) prohibits a party or elected member from incurring electoral expenditure for a State election campaign that exceeds the applicable cap if added to the electoral expenditure of an "associated entity".  An associated entity is defined in s 4 as "a corporation or another entity that operates solely for the benefit of one or more registered parties or elected members".  Section 30(4) thus prohibits a contrivance by an elected member or registered party to use a corporation that operates solely for its benefit in order to circumvent the cap.

187. Although s 30 is concerned with avoidance of the capped limit on electoral expenditure, it does not preclude two or more political parties, even if they are very closely aligned, from acting in concert to combine their electoral expenditure caps and thereby exceed their individual caps.  It does not preclude two or more individual candidates in different electoral districts in the Legislative Assembly, or candidates in the Legislative Council, from acting in concert to combine their electoral expenditure caps and thereby exceed their individual caps.  It does not preclude a party from acting in concert with another party or one or more individual candidates in different electoral districts to combine their electoral expenditure caps and thereby exceed their individual caps.

188. In contrast, s 35 is a provision that prohibits co-ordination by third parties even where the agreement may not result in a third-party campaigner exceeding its individual expenditure cap. For instance, two third-party campaigners could each use $300,000 of electoral expenditure on an advertising campaign on the same subject matter. But they could not spend $600,000 jointly on exactly the same advertising campaign with the purpose of communicating to the public that they were united in a political message. This restriction in s 35 has different purposes from the prohibition in s 144 upon schemes to circumvent a cap. Section 144 would preclude ten third-party campaigners from developing a scheme to run a $5 million campaign in order to circumvent their legislative caps. In contrast, s 35 precludes co‑ordination that is not a scheme and might have nothing to do with legislative caps. It prohibits the force of some political communications that reveal that a message is being sent by multiple third parties jointly rather than individually. It reveals not merely a purpose to avoid drowning out the voices of parties and candidates for election but also one to quieten the voices of third parties in contrast with parties or candidates for election.

     The general and specific purposes of ss 29(10) and 35 and the pleaded purposes

189. Section 3 of the Electoral Funding Act recites five general objects:  (a) to establish a fair and transparent electoral 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 or in local government; (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; and (e) to promote compliance by parties, elected members, candidates, groups, agents, associated entities, third-party campaigners and donors with the requirements of the electoral funding, expenditure and disclosure scheme.

190. These objects are expressed at a high level of generality.  Plainly, they do not exhaust the objects or purposes of every one of the particular provisions of the Electoral Funding Act. In particular, the provisions that impose caps on electoral expenditure were also based on the same purposes as the Previous Act, which the Electoral Funding Act developed and referred to in Sch 2, cl 2 as a defined term (the "former Act"). The purposes of the expenditure caps in the Previous Act included[270] "reducing the advantages of money in dominating political debate", "provid[ing] for a more level playing field for candidates seeking election, as well as for third parties who wish to participate in political debate" and "putting a limit on the political 'arms race', under which those with the most money have the loudest voice and can simply drown out the voices of all others". As explained above, those broadly "anti-drowning out" purposes are legitimate. Indeed the legitimacy of the general purposes of the Previous Act was not doubted when different provisions of the Previous Act were challenged in Unions NSW v New South Wales[271].

     [270]New South Wales, Legislative Council, Parliamentary Debates (Hansard), 10 November 2010 at 27458.  See also New South Wales, Joint Standing Committee on Electoral Matters, Public funding of election campaigns, Report No 2/54 (2010) at 20 [1.101].

     [271](2013) 252 CLR 530 at 545-546 [8]-[9], 557 [49], 579 [138].

191. If the Previous Act had never been enacted then it might have been easy to see ss 29(10) and 35 as based only upon the anti-drowning out purposes. But that would be to ignore, as senior counsel for the plaintiffs submitted, that ss 29(10) and 35 were effectively amending provisions. Their purpose must be assessed in light of the fact that there had not been, and has not been, any suggestion, either inside or outside Parliament, that there was any inadequacy in the manner in which the previous caps served their purpose.

192. The amendments were not the random acts of Parliament, effecting significant change to the legislative provisions for no additional purpose or reason. Instead, the two provisions contained the additional, illegitimate, purpose to quieten the voices of third-party campaigners in contrast with parties or candidates for election. As explained above, that additional purpose is revealed by the meaning and operation of s 35. It is brought into even sharper focus, as explained below, by the legislative history of those provisions. Unsurprisingly, the additional purpose was effectively common ground in the pleadings.

193. In their statement of claim in this case, the plaintiffs pleaded that one of the purposes of s 29(10), when read with s 33(1) of the Electoral Funding Act, is to "privilege political communication by parties and/or candidates over political communication by third-party campaigners during State general election campaigns". That purpose is additional to the purposes of the Previous Act, which, although treating third-party campaigners differently from parties and candidates, did so for purposes other than privileging parties and candidates.

194. In its defence, the defendant denied this purpose in the terms in which it had been pleaded by the plaintiffs but asserted that the purposes of imposing lower caps on electoral expenditure by third‑party campaigners included:

     "to accord to candidates and political parties – as those who are directly engaged in the electoral contest and the only ones able to be elected to Parliament to represent the people of New South Wales and to form government – the capacity to spend more than third party campaigners who are not so engaged and who are not able to be elected to Parliament".

195. Although expressed in different words, there is common ground in the pleadings about this additional purpose.  It is a purpose of quietening the voices of third-party campaigners relative to political parties or candidates for election.

     Illegitimate purpose revealed by the history of ss 29(10) and 35

196. Apart from being common ground in the pleadings and apparent from the meaning and operation of s 35, the additional, illegitimate purpose served by ss 29(10) and 35 is clear from the historical context in which the provisions were enacted. That historical context includes the Previous Act, the 2014 Expert Panel Report[272], and a Joint Standing Committee on Electoral Matters report in 2016[273], to which the Electoral Funding Bill responded[274].

     [272]Panel of Experts, Political Donations:  Final Report (2014).

     [273]New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel – Political Donations and the Government's Response, Report No 1/56 (2016).

     [274]New South Wales, Electoral Funding Bill 2018, Explanatory Note at 1.

     The Previous Act

197. As I have mentioned, caps on electoral communication expenditure were first introduced in the Previous Act by amendments which commenced operation on 1 January 2011[275].

     [275]Election Funding and Disclosures Amendment Act, Sch 1.

198. A registered political party endorsing candidates for the Legislative Assembly became subject to a cap of $100,000 multiplied by the number of districts in which a candidate was endorsed[276], and was subject to an additional cap of $50,000 for expenditure incurred substantially for the purposes of the election in a particular electorate[277].  An endorsed candidate for the Legislative Assembly had a separate cap of $100,000[278].  An independent candidate for the Legislative Assembly[279] and a non‑grouped candidate for the Legislative Council[280] were each capped at $150,000.  A party endorsing candidates for the Legislative Council and no more than ten candidates for the Legislative Assembly[281] had a cap of $1,050,000, as did an independent group of candidates for the Legislative Council[282].

     [276]Previous Act, s 95F(2).

     [277]Previous Act, s 95F(12)(a).

     [278]Previous Act, s 95F(6).

     [279]Previous Act, s 95F(7).

     [280]Previous Act, s 95F(8).

     [281]Previous Act, s 95F(4).

     [282]Previous Act, s 95F(5).

199. The electoral expenditure cap on third-party campaigners was derived from the cap on expenditure for an independent group of candidates in the Legislative Council.  If the third-party campaigner was registered before the commencement of the capped State expenditure period, the cap was $1,050,000[283].  Otherwise it was $525,000[284].  The rationale by which this amount was chosen was that if the cap for third‑party campaigners was substantially less than the cap for independent groups in the Legislative Council then third-party campaigners could conduct the same campaign by running for election to the Legislative Council[285].  An additional cap on third-party campaigners was $20,000 per electorate for electoral communication expenditure incurred substantially for the purposes of the election in that electorate[286].

     [283]Previous Act, s 95F(10)(a).

     [284]Previous Act, s 95F(10)(b).

     [285]See Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 110.

     [286]Previous Act, s 95F(12)(b).

     The 2011 State election

200. A general election for the Parliament of New South Wales was held on 26 March 2011. As the expenditure caps had only been inserted into the Previous Act shortly before the 2011 election, the "capped State expenditure period" was a truncated period from 1 January 2011 to the close of polls[287].

     [287]Previous Act, s 95H.

201. In the capped period, five political parties incurred a total combined electoral communication expenditure of approximately $20 million:  the Australian Labor Party (NSW Branch) – $8.79 million; the Liberal Party of Australia NSW Division –$7.24 million; the National Party of Australia (NSW) – $1.75 million; the Greens – $1.35 million; and the Country Labor Party – $500,000.

202. In contrast with the $20 million incurred by the five political parties, the 43 registered third-party campaigners incurred a total combined electoral communication expenditure of $1.51 million.  The highest amount was by the National Roads and Motorists Association Ltd – $358,000; followed by the NSW Business Chamber – $354,000; and Unions NSW – $197,000.

     The Expert Panel Report

203. Following a series of investigations by the Independent Commission Against Corruption into illegal political donations, the New South Wales Government appointed an "Expert Panel" to consider and report on options for long-term reform of political donations in New South Wales[288].  The Panel was chaired by Dr Kerry Schott.  The other members were Mr Andrew Tink AM, the former Liberal Shadow Attorney-General, and the Hon John Watkins, the former Labor Deputy Premier.

     [288]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 24.

204. The Panel delivered its report in December 2014. In relation to the expenditure caps in the Previous Act for political parties and candidates, the Panel concluded that the Election Funding, Expenditure and Disclosures Act "adequately accommodates" the New South Wales electoral system and that "[t]he current caps provide for a fair contest in Legislative Assembly electorates, by seeking to provide equal spending for party and independent candidates"[289].  However, the Panel was more sceptical about the caps that applied to third-party campaigners.  The Panel said that although third-party campaigners "should be free to participate in election campaigns"[290], this participation should be more restricted than that of individual candidates or political parties.  The Panel might be said to have had two reasons for desiring this restriction.

     [289]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 64.

     [290]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 8.

205. First, the Panel was concerned about an increase in third-party campaigning[291] and the emergence of US-style Political Action Committees[292].  This concern led the Panel to reiterate that third-party campaigners "should not be able to drown out the voices of parties and candidates who are the direct electoral contestants"[293]. However, the Panel did not suggest that these concerns, which were also purposes of the Previous Act, required a reduction in the present cap because third-party campaigners were presently drowning out the voices of parties and candidates or because the existing cap was insufficient to guard against potential future increases in third-party campaigns. Nor was it said that a reduction was required for any other arguably legitimate purpose such as preserving public confidence in the conduct of public affairs[294].

     [291]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 108, quoting Orr and Gauja, "Third-Party Campaigning and Issue-Advertising in Australia" (2014) 60 Australian Journal of Politics and History 73 at 74, but compare at 82.

     [292]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 8, 108.

     [293]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 8.

     [294]de Freitas v Permanent Secretary of Ministry of Agriculture, Fisheries, Lands and Housing [1999] 1 AC 69 at 75-76.

206. Secondly, the Panel "strongly" agreed that "political parties and candidates should have a privileged position in election campaigns" as they are "directly engaged in the electoral [contest], and are the only ones able to form government and be elected to Parliament"[295]. In contrast with this reasoning, the third-party campaigner cap in the Previous Act had been derived from the cap on expenditure for an independent group of candidates in the Legislative Council. Separately from its concern about the voices of candidates or parties being "drowned out" and in contrast with the reasons for the previous cap, the Panel regarded political parties and candidates as deserving of a privileged position, with a danger arising from third-party campaigners running single-issue campaigns that were effective[296]:

     "The Panel is concerned about the potential for wealthy protagonists motivated by a particular issue to run effective single-issue campaigns.  The potential for these sort of campaigns can be seen federally in the well‑funded campaigns against the mining tax and WorkChoices.  In New South Wales, issues such as coal seam gas or electricity privatisation have the potential to unite opposition and motivate wealthy interests.  The Panel is concerned that a lack of appropriate third-party regulation would work against reformist governments pursuing difficult and controversial issues in the public interest."

     [295]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 109.

     [296]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 110.

207. Notably, the Panel did not suggest that the voices of candidates or political parties at previous elections had been drowned out by campaigns against the mining tax, or against WorkChoices, or, most relevantly to New South Wales, in relation to coal seam gas or electricity privatisation.  Indeed, as will be explained below, there was no suggestion of any drowning out caused by a co-ordinated campaign, within the existing caps, against privatisation during the subsequent 2015 election period.  The concern was simply that, unlike parties or candidates, third-party campaigners should not have a voice that was significant enough to "work against reformist governments".  This second concern echoes the language of the proscribed purpose described by Keane J in Unions NSW v New South Wales[297], which is the partial suppression of political communication "by reference to the political agenda".

     [297](2013) 252 CLR 530 at 581 [146].

208. The Panel thus concluded that[298]:

     "third-party campaigners should have sufficient scope to run campaigns to influence voting at an election – just not to the same extent as parties or candidates.  It is therefore fair for parties and candidates to have higher spending caps than third-party campaigners."

     [298]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 112.

209. The Panel's recommendation (recommendation 31) was to reduce the third-party expenditure cap to $500,000, which "strikes the right balance between the rights of third parties and those of parties and candidates".  The Panel said that this was "still well above the approximately $400,000 that the NRMA, the highest spending third party, spent at the 2011 election"[299].

     [299]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 112-113.

210. The Panel also said that it would be appropriate to review the level of the third‑party spending caps after the 2015 election[300].  The reason for review after the 2015 election, explained earlier, was that the period of capped electoral expenditure at the 2011 election had been truncated, precluding meaningful assessment of the effectiveness of the expenditure caps[301].  The Panel said that the 2015 election "will be a better test of the level of the caps and the timing of the capped expenditure period"[302].

     [300]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 112.

     [301]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 64.

     [302]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 64.

211. The Panel also recommended (recommendation 32) the introduction of a provision "to prevent ... third-party campaigners from acting in concert with others to incur electoral expenditure in excess of the caps on third-party expenditure"[303].  A legitimate purpose for this "aggregation" provision was to avoid third-party campaigners acting "with a combined expenditure cap that would completely overwhelm parties, candidates and other third parties acting alone"[304].  However, the Panel did not explain why the provision should go beyond merely schemes to avoid the cap which, by s 144, apply to all persons or why the anti-aggregation provision should extend significantly further than the much lighter restraints on aggregation by parties or candidates.  The obvious inference is that the same reasons for different treatment of third-party campaigners required a different, stricter provision for the "new aggregation provision" that the Panel said should "occur along with" the spending cap reduction[305].

     [303]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 8-9. Based upon what was then s 205H of the Electoral Act 1992 (ACT).

     [304]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 116.

     [305]Panel of Experts, Political Donations:  Final Report (2014), vol 1 at 8.

     The 2015 State election

212. At the general election for the Parliament of New South Wales on 28 March 2015, the electoral communication expenditure by eight political parties during the capped State expenditure period commencing on 1 October 2014[306] amounted to approximately $21.4 million, and included the following amounts:  the Liberal Party of Australia NSW Division – $7.05 million; the Australian Labor Party (NSW Branch) – $6.55 million; the Greens – $2.60 million; the Country Labor Party – $2.53 million; the National Party of Australia (NSW) – $1.88 million; and the Shooters, Fishers and Farmers Party – $717,000.

     [306]Previous Act, s 95H.

213. In the same period 36 registered third-party campaigners incurred a total combined electoral communication expenditure of $5.04 million.  Three of the third-party campaigners incurred expenditure significantly in excess of $500,000:  the NSW Nurses and Midwives' Association – $908,000; the Electrical Trades Union of Australia NSW – $794,000; and Unions NSW – $720,000.  Five union third-party campaigners ran a co-ordinated campaign against privatisation, including electricity privatisation, entitled "NSW Not For Sale".  Each participating union incurred less electoral communication expenditure on the co‑ordinated campaign than their individual caps, with a combined total expenditure of approximately $1.1 million.

     The Joint Standing Committee reports

214. The New South Wales Government indicated its support in principle for 49 of 50 of the Panel's recommendations and referred both the Expert Panel Report and the Government's Response to the Joint Standing Committee on Electoral Matters to consider together with the administration of the 2015 New South Wales election.  The Committee delivered reports in June 2016[307] and November 2016[308].  The November 2016 report can be put to one side as it does not discuss matters relevant to this case.

     [307]New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel – Political Donations and the Government's Response, Report No 1/56 (2016).

     [308]New South Wales, Joint Standing Committee on Electoral Matters, Administration of the 2015 NSW Election and Related Matters, Report No 2/56 (2016).

215. In the June 2016 report, the Joint Standing Committee said that "third‑party campaigners should be able to spend a reasonable amount of money to run their campaign" but it agreed with the Panel that "this should not be to the same extent as candidates and parties"[309].  Hence, the Joint Standing Committee supported in principle the Panel's recommendation that the expenditure cap for third-party campaigners be reduced[310].  However, in light of the third-party expenditure in relation to the 2015 election, including by the three unions mentioned who spent considerably more than $500,000, the Committee recommended (recommendation 7) that before decreasing the limit to $500,000, the New South Wales Government should consider whether "there is sufficient evidence that a third-party campaigner could reasonably present its case within this expenditure limit"[311].

     [309]New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel – Political Donations and the Government's Response, Report No 1/56 (2016) at 49 [7.20].

     [310]New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel – Political Donations and the Government's Response, Report No 1/56 (2016) at 49 [7.22] and recommendation 7.

     [311]New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel – Political Donations and the Government's Response, Report No 1/56 (2016) at viii-ix.

216. The Joint Standing Committee also supported the Panel's recommendation to enact an "acting in concert" offence, and recommended that the offence be enacted without further suggestions (recommendation 1)[312].  It supported the Panel's reasoning for recommending the offence be enacted[313].

     [312]New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel – Political Donations and the Government's Response, Report No 1/56 (2016) at v, viii.

     [313]New South Wales, Joint Standing Committee on Electoral Matters, Inquiry into the Final Report of the Expert Panel – Political Donations and the Government's Response, Report No 1/56 (2016) at 51.

     The purpose of ss 29(10) and 35 against this history

217. The Explanatory Note to the Electoral Funding Bill explains that the Bill was prepared in response to the reports discussed above[314]. The caps for parties and candidates for election were substantially increased, consistently with the need acknowledged in the Previous Act, seven years earlier, for the caps to be indexed[315].  The cap for an independent group of candidates in the Legislative Council, upon which the third-party campaigner cap had previously been based, became $1,288,500[316], increased from $1,050,000.  However, the cap for third‑party campaigners was decreased by more than half.

     [314]New South Wales, Electoral Funding Bill 2018, Explanatory Note at 1.  See also New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 May 2018 at 2.

     [315]Previous Act, s 95F(14), Sch 1.

     [316]Electoral Funding Act, s 29(5).

218. In the second reading speech introducing the Electoral Funding Bill, the Special Minister of State explained the reason for adopting the Expert Panel's recommendation to reduce the cap for third-party campaigners to $500,000[317].  He reiterated that "third party campaigners should have sufficient scope to run campaigns to influence voting at an election – just not to the same extent as parties or candidates"[318].  Then, after concerns were raised during the second reading debate about the reduction of the cap, the Minister said that the Bill was adopting "a specific recommendation of an independent panel of experts"[319]. He also reiterated the concerns that had been present in the Previous Act about third‑party campaigners "drowning out" candidates and "dominating election campaigns"[320].

     [317]New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 May 2018 at 4.

     [318]New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 May 2018 at 4.  See also New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 23 May 2018 at 75-76.

     [319]New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 23 May 2018 at 62.

     [320]New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 23 May 2018 at 62-63.  See also New South Wales, Legislative Council, Parliamentary Debates (Hansard), 23 May 2018 at 67, 79, 93, 105.

219. The Special Minister of State also explained that the Electoral Funding Bill implemented the recommendation of the Panel that third-party campaigners be prohibited from acting in concert with others to exceed the expenditure cap[321].  In his reply speech, the Minister reiterated that the provision implemented the Panel report and said[322] that "[t]hird-party campaigners should not be permitted to circumvent the expenditure caps by setting up 'front' organisations" and that it "does not prevent third parties with a common interest from campaigning on the same issue".  However, as I have explained, the provision goes further than this and imposes significant constraints on third-party campaigners that are not imposed upon parties or candidates.  The close association in the Panel report between this provision and the spending cap reduction invites the inference that the additional purposes for each measure were common.

     [321]New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 May 2018 at 4.

     [322]New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 23 May 2018 at 63.  See also New South Wales, Legislative Council, Parliamentary Debates (Hansard), 23 May 2018 at 67, 93-94.

     Conclusion

220. The Electoral Funding Act increased the cap of $1,050,000 for an independent group of candidates for the Legislative Council to $1,288,500[323].  But, instead of making the same indexed increase to the previously identical cap for third-party campaigners, the cap for those third parties was decreased by more than half.  The new cap for registered third-party campaigners was $500,000[324].  At the same time a new "acting in concert" offence was created for third-party campaigners only.  At the stage of assessing the legitimacy of purpose, the purpose of one cannot be assessed independently of the purpose of the other.

     [323]Electoral Funding Act, s 29(5).

     [324]Electoral Funding Act, s 29(10).

221. The Electoral Funding Act preserved the "key pillars" of the Previous Act[325]. But in replacing the Previous Act with a "new, modernised Act"[326] it implemented an additional purpose.  The large reduction of the cap for third-party campaigners and the associated introduction of an "acting in concert" offence were not irrational or random decisions but were the product of a considered legislative decision to adopt a purpose to privilege political parties and candidates.  As senior counsel for the plaintiffs submitted, it was clear "what this law is doing" but one simply does not "know why it is doing that other than to shut down that protected speech".  That submission should be accepted.

     [325]New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 May 2018 at 2.

     [326]New South Wales, Legislative Assembly, Parliamentary Debates (Hansard), 17 May 2018 at 2.

222. The only rational explanation for the reduction in the cap for third-party campaigners and the introduction of the "acting in concert" offence is that in implementing the recommendations and reasoning of the Expert Panel Report, the Parliament of New South Wales acted with the additional purpose, not merely the effect, of quietening the voices of third-party campaigners relative to political parties and candidates.  That purpose, which was effectively, and properly, common ground between the plaintiffs and the defendant in this case, cannot co‑exist with the implied freedom of political communication.  

223. The answers to the questions in the special case should be as follows:

     Question 1:Is section 29(10) of the Electoral Funding Act 2018 (NSW) invalid because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution?

     Answer:Yes.

     Question 2:Is section 35 of the Electoral Funding Act 2018 (NSW) invalid (in whole or in part and, if in part, to what extent), because it impermissibly burdens the implied freedom of communication on governmental and political matters, contrary to the Commonwealth Constitution?

     Answer: Yes, in its entirety.

     Question 3:Who should pay the costs of the special case?

     Answer: The defendant.