The High Court’s ruling on Victoria’s electoral laws shows how poorly designed campaign finance rules can undermine both fairness and the reforms they were meant to achieve.

There is an unfortunate irony in the High Court striking down Victoria’s electoral funding laws, proving the adage, garbage in, garbage out. Legislation that was ostensibly designed to clean up politics has instead left the state in a sort of limbo, where elements of the law that were designed to fix the integrity of elections are now gone because overall the scheme was poorly designed and hastily implemented.

Sound familiar? The Federal campaign finance laws were ticked and flicked and concerns about their design ignored in similar fashion. Persistent efforts by the federal crossbench and integrity organisations to engage with the government were spurned. The law was rushed through parliament with unseemly haste.

The federal laws have many flaws, flaws that were raised at the time of drafting, yet the government had zero interest in listening, let alone addressing them.

The unanimous ruling in the case brought by independent candidates Paul Hopper and Melissa Lowe that key provisions of the Victorian Electoral Act are unconstitutional is, on one level, a victory.

The court found that the law’s “nominated entity” carve-out, a mechanism that solely benefited major parties, impacted the implied freedom of political communication entrenched in the Constitution. The ruling rightly reaffirmed a core democratic principle, the political playing field cannot be tilted to favour those already in power.

But it is also a cautionary tale. While the law was flawed, even discriminatory, its underlying ambition was not.

Because the 2018 Victorian rules were a package deal, the court could not strike down the nominated entity carve out alone; they had to strike out an entire section of the legislation, covering not only the major parties’ ‘slush funds’, but also transparency of donations, donations caps and public funding.

Had the Government designed campaign finance and transparency rules that ensured greater integrity and fairness, without the loopholes that entrench incumbency, none of this would have happened as the plaintiffs warned the government in 2024 when they sought a resolution.

In short, this could all have been avoided. But for the government’s intransigence it need never have gone to Court.

I had publicly said many times before, well designed caps are good for democracy – the operative words being “well designed”.

Australians are rightly uneasy about the role of money in politics, and there is broad support for caps, transparency, and public funding models that reduce the risk of policy being shaped by those with the deepest pockets and easiest access.

The problem in Victoria was not the goal. It was the execution.

The laws looked and sounded like incumbency protection. Garbage in.

That design flaw proved fatal. Garbage out.

There are likely implications for the fairness of other electoral laws across the country. The High Court’s decision sends a clear signal, if these laws are not fairly designed, if they privilege incumbents, limit participation in our democracy or tilt the playing field further in favour of the major parties, they are vulnerable.

A separate challenge to federal campaign finance laws, brought by Zoe Daniel and Rex Patrick, is already underway. Climate 200 supported both the Victorian and the Federal challenges.

The deeper issue here is not whether a law is constitutional or not. It is about the legislative process and whether law-makers are designing laws to benefit the public or themselves.

Good electoral law is hard. What the Victorian ruling demonstrates is that getting it wrong can produce a raft of unintended consequences, or even a vacuum, with the entire campaign funding and disclosure regime invalidated.

And that may be a worse outcome for the public, for politicians and for democracy.

A well-designed system of donation caps and public funding can enhance democracy, but it must meet the Constitution’s test of fairness as made clear by the High Court in this week’s decision. It can broaden participation, reduce reliance on vested interests, and ensure that elections are contests of ideas rather than bank balances. But those systems must be genuinely fair and constitutionally robust.

They cannot be a protection racket for incumbents and major parties, especially when fewer and fewer Australians are voting for major party candidates.

The temptation for governments, particularly those facing rising electoral competition, is to treat electoral law as just another self-preservation tool. This High Court has put the major parties on notice that they will not wear it.

The lesson here is that campaign finance reform must be fair, and designed following a proper process of consultation. Australians deserve well designed laws that strengthen our democracy, built on a genuine commitment to fairness, not just between major parties, but for everyone who participates in the democratic process.

The views expressed in this article may or may not reflect those of Pearls and Irritations.