The ALP’s rigging of Victoria’s political “donations” laws — under a scheme benefiting the ALP and Coalition — is unconstitutional, the High Court has found in a unanimous decision.
All seven judges of the High Court found the scheme, which allowed the ALP, Liberal and National parties to obtain limitless funds, placed “impermissible burdens” on the freedom of political communication implied in the constitution.
Under the scheme, as previously reported by The Klaxon, the Victorian ALP Government changed the law to allow the ALP and Coalition to be funnelled limitless “donations” via three obscure shell companies.
The changes, which went almost entirely under the public radar, were introduced by the Victorian ALP Government in 2018.
“The law allowed the major parties to be funnelled limitless ‘donations’ via three obscure shell companies”
The ALP Government introduced similar changes at the federal level last year — in moves experts say hogties independents from entering parliament — rushing the changes through both houses.
Those federal changes also being challenged in court, in action brought by former Independent MPs Zoe Daniel and Rex Patrick.
The changes favouring the ALP and Coalition come as support for the two major parties is at historic lows, and continues to fall.
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The Victorian ALP rigged donations laws in favour of the duopoly. Source: The Klaxon
The Albanese ALP Government was elected in 2022 on a platform of “integrity” and “accountability”.
The court case against the Victorian laws was brought by Paul Hopper and Melissa Lowe, who contested the 2022 Victorian election as independents.
Under the remarkable Victorian scheme, three companies — and only three companies — in the state were allowed to receive limitless political donations.
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The three companies were deemed “nominated entities” under the law.
They were a National Party company called Pilliwinks Pty Ltd; an entity called “Cormack Foundation Pty Ltd”, controlled by the Liberal Party; and “Labour Services & Holdings Pty Ltd”, an entity controlled by the “ATF Labour Services & Holdings Trust” — which is controlled by the ALP.
Investigations by The Klaxon revealed that under the scheme, the Liberal Party runs its funds through a company registered to a luxury house in Melbourne’s Brighton.
The “principal place of business” of “Pilliwinks Pty Ltd”, 30 Collins Street Melbourne. Photo: Anthony Klan/The Klaxon
The Victorian ALP Government made the changes as part of “electoral reform”.
Its stated aim was getting big money out of politics and to “ensure a level playing field”.
It introduced a donations cap, restricting payments from any individual or entity to $4,850.
The state of Victoria’s entire “register of nominated entities”. Source: Victorian Electoral Commission
In fact, the field was rigged. A massive loophole was created, allowing limitless funds to flow the ALP, Liberal and National parties through the three shell companies — it called “nominated entities”.
The loophole meant donations between the “nominated entity” and “its registered political party” were “not considered political donations”.
“Gifts between a nominated entity and its registered political party are not considered political donations” – Victorian law, now found unconstitutional
Payments from the three shell companies to the major parties “not considered political donations”. Source: Victorian Electoral Commission
The state of Victoria’s entire “designated entities register” is comprised of just three entities: Pilliwinks Pty Ltd, Cormack Foundation Pty Ltd and Labour Services & Holdings Pty Ltd.
The Victorian National Party’s “Pilliwinks Pty Ltd” is registered to an office tower at 30 Collins Street.
When The Klaxon visited the property, the front desk receptionist said he had never heard of the entity.
Chief Justice of the High Court of Australia, Stephen Gageler, who oversaw the case. Picture: Lukas Coch/AAP
The ALP’s changes, introduced via the Electoral Reform Bill. at the federal level have drawn fierce criticism.
Independent Zali Steggal previously told parliament the changes would entrench the major parties, “make it harder for new entrants to participate” in democracy and “has the unmistakable feel of rigging the market”.
“The unmistakable feel of rigging the market” —Independent Zali Steggal
Independent Kate Chaney previously labelled the federal changes “a disgrace”.
“This is the two parties colluding to stop future political competition,” she said.
“This is the two parties colluding to stop future political competition” — Independent Kate Chaney
“It’s outrageous that the government and the opposition are rushing this through the parliament with no scrutiny, despite saying it’s the biggest change to our electoral system in 40 years,” Chaney said.
