Victoria’s Rigged Donation Laws: Labor Writes the Rules to Suit Itself

Victoria’s political donation laws have been overhauled, with the Allan Labor government passing a replacement framework through parliament on 5 June — but the West Party has already engaged lawyers to challenge the new laws in the High Court, arguing they are designed to entrench Labor’s electoral advantage ahead of the November state election.

The legislation caps political donations at $7,500 over a four-year parliamentary term, bans foreign donations, prohibits anonymous donations above $1,250, and requires real-time disclosure of donations of $1,250 or more. New candidates and parties can receive double the standard cap to help establish themselves.

State public funding has also been restored for eligible participants, with parties receiving $300,000 for their first elected MP, $100,000 for their second, and $55,000 for each subsequent MP.

Labor says new laws keep big money out of elections

Premier Jacinta Allan framed the laws as a victory for democratic integrity.

“Victoria’s elections will be decided by Victorians — not by who has the deepest pockets,” she said.

“Public funding is core to free and fair elections. We’re restoring it.”

The Liberal Nationals voted against the bill. Allan accused Opposition Leader Jess Wilson of siding with big business.

“Jess Wilson voted to keep this year’s election in the hands of big business — we’ve stopped it,” she said.

The new laws also require Labor, the Liberals and the Nationals to return money transferred to their nominated entities between 25 November 2018 and 14 April 2026 above the general cap of $5,030 that remained in their state campaign accounts as of 15 April.

West Party lawyers up for second High Court fight

The legislation was needed after the High Court unanimously struck down Victoria’s previous donation framework on 15 April, in a case brought by West Party founder Paul Hopper and 2022 Hawthorn independent candidate Melissa Lowe.

The court found that Part 12 of Victoria’s Electoral Act — which capped individual donations at just under $5,000 per election period while allowing Labor, Liberal and National parties to draw unlimited funds through their respective nominated entities — placed an unconstitutional burden on the implied freedom of political communication.

Hopper, the West Party founder, had been pursuing the challenge for years after the government declined to act on his concerns. In 2024, he and Lowe wrote to the Victorian government asking for the nominated entity loophole to be removed.

“They chose to ignore our suggestions,” Hopper told reporters after the ruling.

Hopper appeared before the High Court in February, arguing the donation caps unfairly disadvantaged independents and small parties while protecting the major players. He had previously dismissed an earlier government attempt to amend the laws as “putting lipstick on a pig,” arguing the proposed changes failed to address what he described as a fundamentally rigged system.

Following the High Court’s decision, Hopper was direct about where responsibility lay.

“I’ve read the Premier’s statement this afternoon, and I don’t believe she could have been surprised about today’s result,” he said. “We warned the government that their rigged donation laws were unconstitutional and that if they didn’t fix them, we would have to go to the High Court. The Premier called our bluff, we didn’t back down, and today she lost.”

“Labor and the Coalition can’t blame the High Court for the mess they put Victoria in.”

New laws, same problems, say minor parties

Now, with the replacement laws passed, the West Party says the Labor Government has simply repackaged the same problems — and introduced new ones.

“Labor’s new donation laws are still rigged. High Court, here we come again,” the party said on 3 June.

The West Party pointed to what it described as two structural advantages Labor has written into the new laws. First, it said third-party campaigners appear able to perform the same function as the nominated entities the High Court banned, effectively recreating the loophole under a different name. Second, the Labor Government has maintained an existing exemption for union fees — a funding pipeline that benefits Labor and has no equivalent for other parties.

“Labor has maintained an existing exemption for union fees, so Labor is rigging the laws to give themselves an unfair advantage. That is a clear case of the deepest pockets influencing elections, which they are pretending to be against,” the West Party said.

Victoria’s donation overhaul slammed as self-serving

Critics have also pointed to the public funding structure, which ties payments to the number of sitting MPs a party holds. Under this model, the major parties — who already occupy most seats in parliament — receive the bulk of taxpayer-funded support, while minor parties and new entrants receive nothing until they first win a seat. That requires the kind of campaign funding the new laws make hardest to raise.

The West Party also argued the donation cap itself was unworkable for any party attempting to build genuine electoral capacity from scratch.

“Funding a start-up with a $5,000 donation cap every four years is like relying on a chook raffle to pay your bills. We want to set up a strong, compliant party that can compete into the future for the West,” it said.

The party also criticised the Greens for supporting the bill through parliament. “The Greens should not be working with Labor to put through these rigged election laws,” the West Party said.

The laws also retain a four per cent threshold before first-preference votes attract public funding — a rule that most minor parties and new candidates are unlikely to reach, and which effectively closes that funding stream to anyone outside the established political order.

Family First’s Victorian spokeswoman Jane Foreman said the new framework entrenched the same discrimination the High Court had already declared unlawful.

“The High Court said discriminating against minor parties is unlawful. Labor’s answer is to write that discrimination into the new law — and make Victorians pay for it. This isn’t fixing the system. It’s rigging it all over again,” she said.

Labor’s donation fix already heading back to court

Legal experts have warned the new laws could face a fresh High Court challenge, and the West Party has confirmed it has already engaged lawyers to pursue one.

The legislation includes a post-election review clause requiring a three-person expert panel — which cannot be dominated by politicians — to examine the new framework after the November election.

With Victorians heading to the polls in less than six months, the donation rules Labor has written are now law — but whether they survive scrutiny in Australia’s highest court is another matter entirely.