High Court strikes down NSW laws slashing unions' election ad spending

Trade unions in NSW are expected to roll out joint advertising campaigns targeting the Berejiklian government ahead of the March state election after the High Court struck down laws imposing new caps on pre-election advertising spending by unions and other third-party campaigners, in a win for the NSW Labor Opposition.

A coalition of six unions led by Unions NSW brought an urgent High Court challenge to the new laws, passed in May, which slashed the amount of money third-party campaigners such as trade unions could spend on political advertising in the six months before an election, from $1.28 million to $500,000. By contrast, political parties can spend up to $11 million.

The Berejiklian government had claimed the laws were necessary to prevent undue influence and corruption in the political process. Credit: AAP

The laws also prevented unions and others pooling their resources to exceed the expenditure cap, imposing jail terms of up to 10 years for "act[ing] in concert".

The High Court heard the challenge in early December and ruled unanimously on Tuesday that the laws breached the implied freedom of political communication in the Commonwealth Constitution. The court ordered the state of NSW to pay the unions' legal costs.

In a joint judgment, Chief Justice Susan Kiefel and Justices Virginia Bell and Patrick Keane said the state of NSW had not established that the new cap was necessary to "prevent the drowning out of [other] voices" during an election campaign, as the government had claimed.

In a separate judgment, Justice Stephen Gageler said third-party campaigners "must be left with a reasonable opportunity to present its case to voters" and it was "not self-evident, and it has not been shown, that the cap set in the amount of $500,000 leaves a third-party campaigner with a
reasonable opportunity to present its case" to voters.

The NSW Nurses and Midwives Association, Electrical Trades Union, NSW Teachers Federation, United Services Union and Health Services Union joined Unions NSW in bringing the case. The unions have been working on separate campaigns but can now pool resources and hold a joint campaign launch.

Mark Morey from Unions NSW said the "draconian laws ... effectively stopped public criticism of the Berejiklian government" and the result was "more than just a win for third-party campaigners, it’s a win for democracy".

NSW Treasurer Dominic Perrottet said the government was "disappointed" with the decision and "unions will now have the ability to exercise free rein on spending their member's dues - without giving them a say - on wall-to-wall advertising during the NSW election campaign".

"The purpose of our legislation was to clean up politics. The government believes elections should be free and fair, not bought with out-of-control spending by unions and other third parties," he said.

Professor Anne Twomey, a constitutional law expert at the University of Sydney, said the decision left open the possibility the NSW government could "conduct an inquiry in the future that would provide sufficient evidence for it to justify a similar cap and to enact it".

"The court did not itself decide that the $500,000 cap was inadequate - just that it had not received sufficient evidence to be satisfied that it was necessary," Professor Twomey said.

She said it was "unsurprising" the court "took the most direct route to the answer without addressing many of the other issues raised by the case", because it was "heard on an urgent basis in December and the court had to work on it over the summer break because of the upcoming state election".

Professor Twomey said the effect of the court's decision was to remove the expenditure cap entirely for third-party campaigners.

"It does not reinstate the previous cap, as that was in a previous Act that has now been repealed," she said. "This will mean third-party campaigners will be able to pool their funds to run more expensive campaigns in the lead-up to the NSW election."

Former Commonwealth Solicitor-General Justin Gleeson, SC, who appeared for the unions in court, pointed to a number of "prominent and highly successful examples of recent third-party campaigns", such as "WorkChoices, the mining tax, plain packaging for cigarettes, and regulation of poker machines, carbon pricing and coal seam gas".

"The Constitution does require that there be an ability for these types of third-party campaigns to not only exist but to have at least the chance of being successful," Mr Gleeson told the court.

"That is exactly what should be guaranteed, not something which should be treated as a mischief that needs to be shut down."

It is not the first time Unions NSW has mounted a constitutional challenge to electoral funding laws. In 2013, it successfully challenged a prohibition on associations or corporations making a political donation to a state or local election in NSW.