[2018] HCATrans 255
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Sydney No S204 of 2018
B e t w e e n -
UNIONS NSW
First Plaintiff
NEW SOUTH WALES NURSES AND MIDWIVES’ ASSOCIATION
Second Plaintiff
ELECTRICAL TRADES UNION OF AUSTRALIA, NEW SOUTH WALES BRANCH
Third Plaintiff
AUSTRALIAN EDUCATION UNION
Fourth Plaintiff
NEW SOUTH WALES LOCAL GOVERNMENT, CLERICAL, ADMINISTRATIVE, ENERGY, AIRLINES & UTILITIES UNION
Fifth Plaintiff
HEALTH SERVICES UNION NSW
Sixth Plaintiff
and
STATE OF NEW SOUTH WALES
Defendant
KIEFEL CJ
BELL J
GAGELER J
KEANE J
NETTLE J
GORDON J
EDELMAN J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON WEDNESDAY, 5 DECEMBER 2018, AT 10.04 AM
Copyright in the High Court of Australia
____________________
MR J.T. GLEESON, SC: May it please the Court, I appear with MR N.J. OWENS, SC and MS C.G. WINNETT for the plaintiffs. (instructed by Holding Redlich Lawyers)
MR M.G. SEXTON, SC, Solicitor‑General for the State of New South Wales: If the Court pleases, I appear with my learned friends, MR J.K. KIRK, SC and MR B.K. LIM, for the defendant. (instructed by the Crown Solicitor’s Office (NSW))
MR S.P. DONAGHUE, QC, Solicitor‑General of the Commonwealth of Australia: If the Court pleases, I appear with my learned friends, MR C.L. LENEHAN and MR C.J. TRAN, for the Commonwealth Attorney-General intervening. (instructed by Australian Government Solicitor)
MR P.J. DUNNING, QC, Solicitor‑General for the State of Queensland: May it please the Court, I appear with my learned friend, MS F.J. NAGORCKA, for the Attorney‑General for Queensland. (instructed by Crown Solicitor (Qld))
MR J.A. THOMSON, SC, Solicitor‑General for the State of Western Australia: May it please the Court, with MR G.J. STOCKTON I appear on behalf of the Attorney‑General for Western Australia. (instructed by State Solicitor’s Office (WA))
MR M.J. WAIT, SC: If the Court pleases, I appear with MS K.M. SCOTT for the Attorney‑General of South Australia intervening. (instructed by Crown Solicitor’s Office (SA))
KIEFEL CJ: Yes, Mr Gleeson.
MR GLEESON: Thank you, your Honours. This is a challenge to two provisions contained in the Electoral Funding Act 2018 (NSW). The Act came into force on 1 July this year.
KIEFEL CJ: Yes, it received assent in May 2018. I would like to discuss with you at the outset the level of urgency that is said to attend these matters. It is unfortunate of course that it could not be got to the Court a bit earlier if there is some urgency about a determination of the matters.
MR GLEESON: Yes. Taking up what your Honour has said, firstly, there is a degree of urgency about the matter. The capped election period, which is the subject of the challenge, commenced on 1 October, so the burden of the two provisions in question is currently in force and runs for the six months up until the election in late March 2019. So the burden is there.
As to the second matter, did we get here as quickly as we possibly could? We certainly tried as hard as we could. It was a matter where it was important to plead it properly. We worked on that as hard as we could and then the parties worked very hard to get a special case which is in good shape, we would submit.
KIEFEL CJ: I have no doubt that the lawyers did their best. It was known, however, that the Bill was to be passed and it received Royal Assent on the – it passed both Houses at the end of May and received Royal Assent shortly thereafter. Pleadings were not filed until the middle of August, 10 August, and the first directions hearing was not until the end of September. That does make it a little difficult to have it any earlier than now for hearing.
MR GLEESON: Yes, your Honour. We do not ask for any higher claim to urgency than we are entitled to, given how we got here. We tried to get here as fast as we could in those circumstances.
KIEFEL CJ: I understand that, yes.
MR GLEESON: I think as soon as the pleadings were filed we then were moving to get a directions hearing when we could and expedited matters from there. In terms of the submissions, certainly at that stage of it all parties have been very expeditious in meeting a very tight timetable.
KIEFEL CJ: Yes, I see that. Yes, thank you, Mr Gleeson.
MR GLEESON: Thank you, your Honours. Your Honours, could I commence with the statute which is at the joint book of authorities, volume 1, tab 2, commencing at page 15. The objects are found in section 3 on page 22. Objects (a), (c) and (e) will be relevant to this case. They are expressed at a high level of generality and, so expressed, those objects are not incompatible with the functioning of representative and responsible government under the Constitution. The question could arise at a more precise level as to whether the particular provisions can be related to those objects and how they can be related to them.
The Act builds off the now repealed Electoral Funding Expenditure and Disclosures Act 2009 which was the subject of the Unions (No 1) challenge. That earlier Act – in short, the EFED Act – is referenced repeatedly throughout this Act as the provision upon which the Act is built.
The first provision that we challenge is section 29(10) which is on page 46. That is the provision establishing the cap for third‑party campaigners of $500,000 if registered in time – if not, half that amount – read together with section 33 on page 51, which makes it unlawful to incur expenditure in excess of the cap with the criminal offence provision, section 143 at page 104.
GAGELER J: Mr Gleeson, to be precise with your challenge to subsection (10), is it really a challenge to the dollar figure - if the cap were set at the same level as under the EFED Act, would you be pressing this claim?
MR GLEESON: No.
EDELMAN J: In effect, your challenge treats 29(10) as though it were an amending Act and asks what the purpose and the effect of that amending‑type provision is.
MR GLEESON: That is central to our challenge. It is not the entirety of it because we would say if we had nothing other than the Act we can find the burden and the disproportionate burden within the Act but when it does come in as an amendment, the purpose of the amendment is, as I say, central to our argument and in short we say the purpose of reducing the cap by 50 per cent in nominal terms but about 60 per cent in real terms because the other caps were indexed upwards, the purpose was really twofold.
Firstly, it was to embody a notion not in the previous Act that the parties and the candidates have a privileged position in the debate of ideas by reason of that status as the people who and the things which seek to stand for office. So, that privileging by virtue of status, we say has come into the 60 per cent reduction in the cap and we say that is an impermissible purpose under the Commonwealth Constitution.
So, that is at the core of that change and then in respect to the aggregation provision, section 35, which again is a new provision, we can see in the heading to the section the predecessor is nothing in the old Act. It is something that came out of the Electoral Act 1992 (ACT), a provision now repealed. What that has done is for the first time imposed a burden backed by a criminal offence against only one group of participants in political debate, making it unlawful for them to act in concert with anyone else to incur expenditure which exceeds their individual cap. It is a provision which is one way in the sense the only people caught are third‑party campaigners. It catches them if they act in concert with anyone else, i.e. with another third‑party campaigner or with the party.
Finally, it does not catch any other participant in the debate who engages similarly in concert, e.g. if two parties in coalition put out a joint TV ad, they are not caught by a provision like this. So the purpose of bringing that into the old Act is also critical to our case.
KIEFEL CJ: In relation to the challenge to section 29(10) and the purpose that you have identified of creating a privileged position, in McCloy and in Brown I think in the joint judgments it was pointed out that it is ‑ one can slide easily from purpose into effect.
MR GLEESON: Yes.
KIEFEL CJ: And that one needs to distinguish “effect”. If one were in the area of “effect” the questions of suitability and necessity would probably be more in the forefront, would they not?
MR GLEESON: Yes. So we have sought to put it two ways. Firstly, we have sought to attribute this as the purpose, the moving purpose, of the amending provision and we seek to argue that if that is the purpose that is not compatible with the Constitution and the challenge succeeds at that point.
Separately we have said if this law gets past purpose in some way, and we are then at the full proportionality testing, it will fail at that point because once one asks – once one assumes there is a legitimate purpose being pursued here and takes the State’s case at its highest, what it is saying is, firstly, we want to get money out of politics - they say that - and they say, therefore, we have expenditure caps on parties and therefore, we have expenditure caps on third parties and then they get to the crunch and say your cap as a third‑party campaigner has to be set so low that you do not, as they call it, drown out the privileged participants.
Yet, once one unpacks that concept, their idea of drowning out is that you must be kept to $500,000 when, for example, the party, and your Honours will see this in section 29(2), a party, which stands in all 93 seats will get a cap of $11.3 million and in addition to that the party’s candidates under subsection (6) will get individual caps which, if they stand in all seats, add up to $11.3 million.
So the party and its candidates can potentially spend up to $22.6 million and yet it is said these other valuable participants in the debate must be capped at $500,000 for some reason of avoiding drowning out. Once one gets to that part of the case we would say that will fail at each stage of suitability, necessity and adequacy in the balance.
GAGELER J: You would not challenge it if it were $1,050,000?
MR GLEESON: If it were $1,050,000 and if it were otherwise sitting within the relativities of this scheme we would not challenge it. I have indicated one relativity in the Act that is important.
EDELMAN J: Is it necessary to your argument to say that a drowning out or a possible drowning‑out effect cannot be one of the purposes, or is it sufficient if there are multiple purposes underlying section 29(10), one of which is the purpose that you say is impermissible?
MR GLEESON: The latter is sufficient for our purpose. There obviously are a number of purposes because of the way the relativities have been set and the general nature of it. I did want to draw attention to the second relativity, which in one sense covers the other main part of the case, which is under section 29(4) and (5), what I will call for short “a minor party” – that is, a party only targeting the Upper House, the Legislative Council or only targeting up to 10 Lower House seats – it is a cap of $1,288,050. If you are a group of candidates for the Upper House you get the same cap. To become a party you need to have under the Electoral Act 750 members pay $2,000 and have a constitution. To be a group all you have to do is to fill in a form.
The logic – I might just come to this immediately ‑ which underpinned the former Act was that an appropriate functional equivalence could be drawn between the people in the positions of the parties or groups contesting the Upper House and the third‑party campaigners, and that is why they got the same cap.
The logic inherent in this was that a major party won, targeting government in the Lower House and targeting many or all of the 93 seats, has for that reason a need to speak appropriately to that goal and messages about whether they should form government or not and whether they should be in all these seats explained why the major party was given a higher cap than the other participants in the debate.
One of the problems that Parliament had to grapple with was that in some of the limited overseas models where there are caps on electoral expenditure they are in unicameral parliaments and so bringing it to New South Wales something had to be done to adjust for the fact that the Upper House exists. It has 42 members, it rotates every four years half the House, it will not form government per se but it is an important part of the process and so the judgment made by the Parliament under the earlier Act was that the minor parties stand in a certain relativity to the major parties and then the third‑party campaigners sit in an equivalent position to the minor parties and groups. That is the logic which has been disrupted by the amendment.
Your Honours, the place I was planning to go next was to the statutory context, if that is convenient. Now, this is what we deal with in paragraphs 4 and 5 of the outline. Perhaps the one other matter I need to deal with on the Act itself is the definition of “electoral expenditure” which in section 7 on page 29. Could I observe that under subsection (1) the definition is broad in two respects: firstly, in that it captures not just communications promoting or opposing directly or indirectly parties or candidates but it captures more broadly communications:
for the purpose of influencing, directly or indirectly, the voting at an election –
So one can readily contemplate cases where a third‑party campaigner might want to promote a particular attitude to voting which may not necessarily be a vote for or against a particular candidate, e.g. a third‑party campaigner might want to say, vote for independents, put them ahead of the parties because we need more independents in the system. That would be caught by the second limb of it and that would be a very valuable message, the sort of message that a third‑party campaigner would be uniquely placed to contribute to the political debate. It will not be what the parties would want to hear.
The second aspect of section 7 is the breadth of the forms of media that are caught and you will see that it is comprehensive in its scope. It covers not just the broadcast media of radio and television, which were the subject of the prohibition in ACTV, but it covers almost any other way in which messages can be communicated.
Could I observe with section 7(2)(a), the Commonwealth has raised an issue and then perhaps withdrawn it that you need to decide whether the Commonwealth has an exclusive power over federal elections and if you decide it does then you will read a particular gloss into this provision so that substantially means not substantially but means more than insubstantial or more than incidental.
That has attracted the interest of a number of the States. As we read the submissions the Commonwealth now accepts that you do not need to decide either that separate constitutional issue which we do not raise or say anything about or the construction issue and the reason for that is that, even if the Commonwealth gloss were correct, it would not alter any of the issues we raise on burden and proportionality. The provision still does impose a very substantial burden on communication irrespective of how you read “substantially” and the Court has explained all those matters in Unions (No 1) about the indivisibility of communication. Could we, though ‑ ‑ ‑
KIEFEL CJ: The Commonwealth’s submission is rather forward looking, perhaps?
MR GLEESON: Yes, they are interested in another case. But to the extent there is any hint in the Commonwealth’s submissions - there may not be - that this question may flow through into proportionality assessment in this case - we suspect there is not such a hint - we would simply rely upon what the Court has held in Unions (No 1) about the indivisibility of communication and also reference the passage in Roberts v Bass 212 CLR 1 at 73 which is in volume 4 at page 1375 where the Court affirmed that:
statements made . . . during an election . . . concerning the record and suitability of a candidate for election to a State Parliament. Such statements are at the heart of the freedom of communication protected by the Constitution.
So it is but one example of where matters at the heart of the freedom are burdened by this law irrespective of the construction of section 7(2). Before leaving that section, some of the parties also draw attention to section 7(3) as if the dominant purpose test in some way ameliorates the burden or modifies the analysis which will apply in this case. It does not. It simply eliminates communications where it is a mere non‑dominant purpose but one sees in section 7(3) again both limbs of the types of communications caught under subsection (1).
Another example of what I will call a second limb communication which a third‑party campaigner might be acutely primed to make would concern a matter of policy where the parties, the main parties are, for whatever reason, in unison, in lockstep but there is a very valid argument which might be made against that policy and your Honour Justice Keane gave one example of that in Unions (No 1) where the parties might be in lockstep on say, migration, and it is actually the third‑party campaigner saying the rules need to be different that gets that message out. Climate change may well be another example where the parties take one position but the third‑party campaigner can inject into the debate that valuable different view.
Your Honours, I then was going to go to the context and that is in the next tab of volume 1 of the joint book, tab 3 – this is the former Act - as two authorities supportive of the notion that the legislative context may inform the current purpose. We would refer to the decision in Rowe - I will just give the reference in the book; it is at volume 4, tab 21, and Brown, in this Court, at paragraph 101. So, in the former Act your Honours will see on page 168, section 95F – and this was the logic of the former Act. If one starts, perhaps, at subsection (7) – if you are simply:
a candidate not endorsed by any party –
your cap is $150,000. The basic logic underlying that is that that is an amount which may be sufficient for you to get out whatever messages you need to support your candidacy for an electorate and an amount which – because other people will be appropriately capped in the same fashion – will prevent the wealthy drowning out other voices. One immediately then sees in subsection (8), there is an equivalent cap if you are a non‑grouped candidate for the council.
Then, if one goes back to the party candidates, under subsection (2), their cap is $100,000 – I am sorry, the party candidates, their cap is subsection (6) – that is $100,000. One says, why $100,000, not $150,000? The answer is that with the party’s cap – which is subsection (2) - the party gets $100,000 times the number of electoral districts. But under subsection (12)(a) the party can spend up to $50,000 of its party cap on a particular electorate.
So, in a sense, it is generous to the parties. It is giving them the chance to, if they would like, allocate up to $150,000 between the candidate cap and their cap per electorate or they can leave their candidates at $100,000 per electorate and use the rest of the money for the general campaigning.
So, what that indicates is under subsection (2) this was a total $9.3 million cap allocated to the parties. Of that they could divert half to individual electorates if they want to. So subject to that diversion, or allocation question, the underlying logic is the major parties are entitled to spend more because they are contesting for government which no one else is and they are contesting across most or all seats and, therefore, presumably, have additional messages – valuable messages to get out to the community beyond simply the messages of an individual candidate.
Then we see the choice made for the Upper House, which is subsections (4) and (5). That cap of $1,050,000 looks very much like 10 times the party’s cap for a Lower House seat. So the judgment is you are contesting the Upper House or perhaps a few seats in the Lower House; you are not contesting for government. You will be put in a position as if you were contesting 10 Lower House seats on a party basis. Then the final critical relativity – the critical one is in subsection (10), which was the third‑party campaigner cap matching the minor parties and the groups in the Upper House. Then third parties were also given a sub‑cap in (12)(b), lower than the parties.
Now, we have not challenged that. That provision could be seen, at least arguably, to have a separate legitimate purpose which is to the extent there is a fear that a single candidate finds a third party targeting the candidate and allocating the whole of its $1 million to that single electorate to drive the person out, that being seen to be an unfair form of drowning out, that mischief is addressed by the sub‑cap.
So to the extent there is some material in the submissions suggesting that either the reduction in the cap to $500,000 or the need to have a lower cap at all than the parties is about protecting individual candidates who get a big ambush in their electorate from a third‑party campaigner, that suggestion should be dismissed because it is dealt with by the separate sub‑cap. So what we are left with under the old scheme is the third‑party campaigner could, if it liked, devote a fairly small amount of its money to a fight over a particular electorate but, for the main part, it is put in the same position as the Upper House parties and groupings in the contest of ideas. Could I also explain in the old Act the next provision, section 95G ‑ ‑ ‑
GAGELER J: Mr Gleeson, could I just go back to the cap and the sub‑cap. Why could not a third‑party campaigner under the old Act spend the entirety of the $1 million on one seat, focusing on one seat?
MR GLEESON: Under subsection (12) your applicable cap, the $1 million, is then subject to an additional cap within the $1 million.
GAGELER J: Yes, I see.
MR GLEESON: For expenditure provided substantially for the purpose of the election in the particular electorate.
GAGELER J: Yes, thank you.
GORDON J: That is subject to subsection (13).
MR GLEESON: Which gives us a further definition of what that means. So there is no problem with drowning out of individual candidates under the old law or the new law. I was then going to draw attention to section 95G, particularly subsections (1) and (2). These are the provisions we identify in the old law – and this is relevant to the aggregation issue – which have been removed from the new law. They are part of the problem with the new aggregation provision. Not only does the new one only target TPCs but, at the same time, there has been a removal of a form of aggregation which previously applied to parties.
So 95G(1) gives us a definition of when registered parties are associated and I draw attention to paragraph (c). So within the political framework of New South Wales one can readily contemplate a recognised coalition of parties. You may be endorsing different candidates. Then subsection (2) cuts in. In that circumstance the $100,000 party cap for a particular district where there are candidates endorsed by the associated parties must be shared between the parties, and subsection (b) the same occurs in respect to a group of candidates in the Upper House. Now, those forms of aggregation have gone.
Could I then show your Honours the extrinsic material which explains to some extent what this scheme was designed to do? That will be in volume 4 of the special case book at page 1371.
GORDON J: What tab number is that?
MR GLEESON: I am sorry, that is tab SC110. This is in the panel’s report in 2014, looking back to the original position. On page 1371, between lines 15 to 25, the panel gives an explanation for what they call the current system, at least as it deals with parties, candidates and groups, and it says that the various caps:
are focussed on contesting Legislative Assembly seats and winning government ‑
So there is the “and winning government”. That is why you get a higher cap if you are a party targeting the Lower House and winning government. Then there are:
caps that apply to those who are campaigning on particular issues ‑
That would be the third‑party campaigners:
and caps for those seeking to influence the legislative agenda by securing representation in the Legislative Council.
So that is referring to the minor parties and the groupings and it is saying there is a functional difference between you and the major parties because essentially you will not be winning government but you will be seeking to secure and influence the legislative agenda. That is a general description of the purpose of the structure of the old scheme. You also see at the end of that paragraph a recommendation that the caps be indexed. Then can I show how the third‑party campaigners were conceived. That will be at page 1417, which is still in the same tab, between lines 40 to 50.
KIEFEL CJ: I am sorry, what was that reference?
MR GLEESON: It is page 1417, lines 40 to 50.
KIEFEL CJ: Thank you.
MR GLEESON: There was evidence given to the panel by the former chair of the relevant committee that:
The figure of $1 million for third party groups was not simply plucked out of the air . . . in 2009.
It was chosen because of its relativity with the cap otherwise applying in the Upper House. So there was a view that there was a relevant functional similarity between people who are targeting the Upper House to influence the legislative agenda or third‑party campaigners. That similarity was seen to have the effect that if you gave a lower cap to the third‑party campaigners what would they do? They could simply put up some candidates as a group in the Upper House and they suddenly get to spend the same as the others. So that was a perceived mischief of not treating them the same. That is part of what we know about how this came about.
Apart from that, if the Court has volume 5 of the special case book, behind the very last tab – I am sorry, volume 5 of the authorities, behind tab 30 at page 2121, there is the second reading speech for the 2010 amending Bill. The second paragraph deals with the topic in a fairly general fashion, indicating that the scheme provides:
for a more level playing field for candidates seeking election, as well as for third parties who wish to participate in political debate. These reforms are about 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.
Now, we have no complaint with that paragraph as a summary of the purpose of the old law, or for that being other than a proper purpose, and there is not a hint of a suggestion there of privileging. There is no suggestion that parties and candidates can spend more because their messages are more important by reason of them being the people standing for office.
Now, at the 2011 election you have what occurred in volume 1 of the special case book at pages 111 to 113. It is particularly paragraph 28 of the special case. In the first year, this was only a three‑month period, not the full six‑month period, which may impact on the numbers and in total there were about 20 or 30 third‑party campaigners representing a variety of interests. They spent in total about $1.5 million. The two largest spenders at that stage were the New South Wales Business Chamber and the NRMA. Unions spend various amounts less than that.
As one would expect with third‑party campaigners, their need to campaign may vary from time to time, depending on what are likely to be the issues in the debate or the ones they wish to tender into the centre of the debate, and so one will see various relativities between different third‑party campaigners.
Now, you will then see, if your Honours could go over to pages 114 to 115, particularly paragraph 33 of the special case, that in that same three month capped period the parties spent about $20 million between them. It is only a three‑month period. The period will be six months at the next election. But even at the very outset one can see that any suggestion that the third‑party campaigners were in some way drowning out the parties or preventing them getting their messages across is ‑ would not be sustained.
If anything, the original system was designed to give the parties a very good opportunity to try and campaign for government and left third‑party campaigners in a position where they could get their messages out on an equivalent basis to Upper House parties. So that is where the position stood in 2011.
Could I then come to the 2014 panel report which we say introduced the problem? So that is the document again in volume 4 of the special case book at tab 110 and the panel’s summary recommendation is at page 1314 and in the second sentence of the section on third‑party campaigners we submit is the origin of the privileging error that then found its way into the amending law. The panel says it believes that they – the third‑party campaigners –
should be free to participate in election campaigns but they should not be able to drown out the voices of the parties and candidates –
and I emphasise:
who are the direct electoral contestants.
One immediately sees that the concept of being the direct electoral contestants is put forward as the basis upon which the relativities need to be struck and at this point it is the voices of the parties and the candidates generally. So it is not even just the major parties. It is the minor parties or the groupings contesting the Upper House and the premise is that because they are the direct electoral contestants they should not have their voices drowned out by people who by definition are not direct electoral contestants.
One immediately asks, what sort of drowning out does this mean. This is not an American super PAC which has an unlimited ability to raise money and spend money in an election, as long as it does not co‑ordinate with a candidate. It is not that sort of drowning out. What it really is is privileging which is saying the primary messages that people should be hearing are those coming from the direct electoral contestants and people who are not prepared to stand should be given and reduced to a marginal role in the contest over ideas. You can see in the next paragraph it says:
In Australia there is a longstanding concern on the conservative side of politics that trade unions provide an unfair advantage to the Labor Party.
Now, I observe there to note that there is no suggestion by New South Wales or any intervener that this law can be supported on the ground that it is somehow necessary to remove unfair advantages between trade unions and the Labor party so that can be put to one side. Then it says:
There is also a high level of concern about the increase in third‑party campaigners and the emergence of US‑style Political Action Committees.
Now, at this point the panel, with respect, has gone completely wrong because there can be no conceivable parallel between a US‑style political action committee and a third‑party campaigner allocated the $1 million cap under the old law. As I have indicated, the political action committee is uncapped in what it does as long as it does not donate to the candidate and one of the reasons there is so much concern about super PACs in America is that it is in a context where there are relatively strict limits on donations to parties and candidates and these super PACs are drowning them out in the real sense of the word because of their unlimited ability to spend as long as they do not coordinate or donate.
So where, we submit, this process has gone wrong is that if these are the mischiefs - they are in summary form here, they are spelt out in detail – if these are the mischiefs the panel thought were the reason to reduce the cap of the third‑party campaigners by 50 per cent none of them could be seen as proper purposes within the Australian Constitution and if one gets to the later stages of the proportionality analysis, the law would fail to be reasonably appropriate and adapted to achieve any legitimate purpose that might be buried in these other matters. In the next paragraph they say:
The current third‑party spending cap of $1 million is, however, too high and we suggest halving the spending cap –
One begs to ask why, why is it too high other than the privileging notions that are appearing in the previous paragraph. Then there are two new aggregation provisions. One is to prevent:
parties from avoiding their own spending cap by establishing front organisations to incur electoral expenditure on their behalf –
and then the second one is:
third‑party campaigners –
to be prevented:
from acting in concert with others to incur electoral expenditure in excess of the caps –
Now, immediately one sees there the differential treatment. There can be little complaint with an aggregation provision which says if something truly is your front organisation, your expenditure must be aggregated and there can be little doubt that that is an appropriate provision to apply to a party and it could be an appropriate provision to apply to a candidate or a third‑party campaigner but that is the only aggregation that has been given to the parties whereas the third‑party campaigners are subject under the recommendation to this special aggregation provision.
So, your Honours, that is the summary of what drove this entire law and we submit that most of the case can be answered by assessing whether what is on page 1315 reflects purposes consistent with the Constitution and purposes properly responded to in the present law. Could I briefly show you in the body of the panel’s report two or three other important supportive matters?
If I could ask you to go, please, to page 1365 which is the discussion on expenditure caps, you will see on the next pages, 1366 and 1367, some useful tables and charts indicating the spending by the parties and their candidates and others in the 2011 election and from figure 5 one sees perhaps unsurprisingly that in the election year, that is 12 months straddling the election, the total expenditure by parties and candidates massively dwarfed the expenditure in other years and it was $40 million. The next table shows us how that was split between parties and candidates and so on.
So, if New South Wales says this is a scheme about getting wealth out of politics, one has to start with a hard realisation that the parties have been allocated these caps and they are spending these substantial amounts of money. Now, next if I could ask you ‑ ‑ ‑
KIEFEL CJ: Your submission is that there is no basis in fact on the material that the panel had, there is no basis for disfavouring one source of communication.
MR GLEESON: That is our submission at its essence. They had no material to do it. All they had was a thesis of privileging ‑ ‑ ‑
KIEFEL CJ: Which in other places may have some validity.
MR GLEESON: It may or may not depending on the surrounding scheme.
KIEFEL CJ: But for this Court to hold that a purpose of disfavouring one source is wholly invalid would prevent any Parliament legislating in the future where it became obvious that some sources were, in fact, drowning out voices.
MR GLEESON: So, your Honour, our complaint is, as you put it to me, that it is that purpose being pursued absent any evidence, any evidence of mischief, of relevant mischief.
KIEFEL CJ: That is not to say that the purpose can never be a valid one. It is just that in this particular case there is no fact. Are we not more in the territory of showing that there is no need for it at the present time?
MR GLEESON: We may well be, your Honour, and when we come to the stage of necessity - this case is actually in the uniquely privileged position that the alternative measure is not simply thought up by counsel or a party, it is the measure which the polity previously adopted ‑ ‑ ‑
KIEFEL CJ: Quite so.
MR GLEESON: ‑ ‑ ‑to deal with this problem and did so on a considered basis and then had two elections experience of the previous measure. I am only here at the first one but we then have 2015 and found zero problem, found no problem and then said, however, let us simply privilege the insiders over the outsiders. So, if and when we get to the necessity stage, we submit the Court is uniquely equipped consistent with judicial function to say there is the reasonable alternative. It was the previous law. You have provided no reason in evidence or consistent with the Constitution to rip up that law. That is at the core of ‑ ‑ ‑
GORDON J: Is that not a complete answer, though, in your case in this sense that if you go the – what ultimately happens are the time these provisions enacted – I assume you are going to come to it – you have a joint committee standing report which suggests, listen, assume for the moment the cap is fine, you make no point about the cap, we accept the reduction but we are going to send you away to find some evidence to support it and there is none. Is that not the answer on your case, I mean, do you need all of this in order to succeed? I mean, it is not dissimilar to the approach of Chief Justice Mason in ACTV. I can accept purposes without determining whether or not they are valid purposes or not for future. I can accept that this is the mischief that they sought to achieve but on any view it is just not justified.
MR GLEESON: I am tempted to say yes, but I do not want to just abandon this theme, your Honour.
GORDON J: No, I am not seeking to abandon it. I am just trying to make sure what the crux of your case is.
MR GLEESON: At its narrowest, that is the case. At its narrowest, that is the case and nothing more is needed, in a sense, in that you made the change, the panel said, twice, you must get evidence and you must look at 2015, see what happens then and see if there is a problem and the Parliament said, we will just pursue this idea. So, at its narrowest, that is the case.
The part I do not want to gloss over too lightly – and, perhaps, my answer to your Honour the Chief Justice was insufficiently clear. If we can win at the purpose stage it is because the purpose is not simply disfavouring one source of ideas, but it is disfavouring a source of ideas purely based on a status or a functional position within the system.
EDELMAN J: That submission does not need to rest upon an attack upon the asserted purpose at 1315. One could, could one not, say the purpose of drowning out that existed in the previous Act still exists but there is an additional but impermissible purpose, on your submission, of privileging that has led to the reduction to $500,000.
MR GLEESON: Yes, we do put it that way as well, if I may, and, in that sense, when we say “privileging” we are invoking notions of discrimination and we are seeking to invoke your Honour Justice Keane’s approach in Unions (No 1) to why there was a bias and what ACTV tells us about vices.
Part of the answer to all this is, e.g., the Commonwealth – maybe you can draw differences between different forms of speech. New South Wales says maybe it is just policy choice and they say this is just a case of – they have decided to pursue an end more vigorously than they pursued last time. So we have to in some way grapple with those ideas that are floating around in the case.
KIEFEL CJ: But, Mr Gleeson, if the concern about drowning out voices remains just as valid, is not the privileging that is referred to an effect rather than a purpose?
MR GLEESON: Your Honours, I would like to say it is a purpose, if not effect and then continue the analysis along because - but to say that, as I say, it is disfavouring voices based on a notion of status.
KIEFEL CJ: That is an effect, too, is it not? The purpose in the way in which it has been discussed in McCloy and Brown by both the joint judgments and by Justice Gageler, I think, is to identify the mischief to which it is addressed.
MR GLEESON: Yes. Yes, there is a strong strand in the Court’s judgment which would be identifying the mischief. You can read material in here saying the supposed mischief is drowning out. Is it possible to conceive of drowning out in an appropriate case as a mischief that can be appropriately responded to consistent with the Constitution? The answer to that is yes. I am not taking that issue on.
So, at some point, relatively soon, we come back to the narrow point Justice Gordon raised with me. So, can I just complete the evidence to show that is what happened – your Honour’s summary is accurate. I was asking you to go to the body of the panel report for these reasons. At 1414 to 1415, you see the more detailed discussion of the submissions made by various parties. At the top of 1415 there are the submissions about concerns that political action committees can somehow get a foothold in Australia.
I draw attention at the foot of 1415, lines 45 to 50, there is a reference to a number of prominent and highly successful examples of recent third‑party campaigns:
WorkChoices, the mining tax, plain packaging for cigarettes, and regulation of poker machines, carbon pricing and coal seam gas.
One way of testing our underlying thesis is we are arguing that 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. That is exactly what should be guaranteed, not something which should be treated as a mischief that needs to be shut down.
Over at page 1416, lines 20 to 30, we see there expressly the privileging notion. It is balanced by saying that the third parties should be recognised as participants. Then at 1417, lines 30 to 40 – this seems to be close to the heart of the panel’s reasoning – they are worried about the ability of a third‑party campaigner to run a well‑funded campaign, as occurred federally, in relation to 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.
This will somehow prevent:
reformist governments pursuing difficult and controversial issues in the public interest.
There is simply no basis to suggest that with the existing cap of $1 million there could be any concern that somehow reformist governments are going to be prevented from doing their work. That leads to the recommendation at 1419.
GORDON J: I thought the proposition at the bottom of 1417 was interesting in the sense that, at least as I understood the way this report worked, there was an acceptance by reference to evidence that the caps that had been set under the old regime did not affect the third parties’ ability to participate in political communication. It is at the bottom of the page.
MR GLEESON: Yes, I would agree that that is a fair reading, your Honour, of what was being said there, at least in respect to the old caps ‑ ‑ ‑
GORDON J: That is what I meant, in relation to the old caps, the old elections.
MR GLEESON: ‑ ‑ ‑ and what was known of the 2011. You will see on 1418, lines 10 to 15, people described as stakeholders. One can imagine who they are: parties and candidates. They:
opposed third party spending limits being set at the same level . . . it is parties and candidates that should be given primacy, as they are the direct electoral contestants –
That is the thesis that New South Wales advances in support of the law. At 1419, lines 10 to 15, the same idea. Then the critical caveat is at lines 25 to 35, although we recommend the reduction, it is:
appropriate to review the level of the third party spending caps after the 2015 election, if it becomes apparent that they are causing concern.
So there is a need to have evidence.
Could I go to what happened in the 2015 election, which is in volume 1 of the special case book. At page 114 the political parties spent about $20 million between them during the six‑month period. You will observe that a party targeting the upper House, the Shooters, Fishers and Farmers Party, spent $716,000. Then the third‑party campaigners are at paragraph 29, and they spent in total $5 million. The biggest spenders were the nurses union, the ETU, Unions NSW and the Minerals Council, Teachers Federation and the New South Wales Business Chamber. We have two indications in the special case of the real‑world expenses of conducting a campaign as a third‑party campaigner which is seeking to have a real chance to influence debate.
In relation to the nurses union, at page 103, paragraph 5be, of their $907,000 spent $677,000 was on a television advertising campaign over a 19‑day period.
At page 143, which is tab SC4, you will see some details of what it cost to run a campaign. Page 144 shows the way in which the costs were broken down, and 153, a little difficult to read but that is the overall invoice for 45‑second ads and 15‑second ads, running over a three‑week period in four parts of a State. And over the page you see a breakdown of the cost of the ads.
Now, what we have there is a real‑world example of the former law of communication permitted under that former law and what we would submit to be a valuable form of communication protected by the Constitution. We therefore know that, by reducing the cap to $500,000, that is a form of communication which is now shut down and rendered illegal and, we submit, based on no evidence of any possible drowning out that it was achieving.
The second example I wanted to give you of real‑world communication, which relates to the aggregation provision, arises out of page 109 of the special case, which was the Not for Sale Campaign. From paragraphs 22 to 23 this involved five union bodies coming together jointly to run a campaign focusing on government policies of privatisation across “power, hospitals and TAFEs and the media”. And one sees the cost of that in 24 and some further details through from 25 to 27. And the net effect of that was that the total of that joint campaign was about $1.1 million.
Now, we know a little about what that campaign looked like from page 274, which is tab SC12. One can see the general theme of the campaign of 275 and then a number of particular aspects of the campaign: 277, health care; 278, TAFE; 279, council mergers; 280, electricity. And 281, a fairly direct invitation to vote in a particular fashion if one was persuaded by the merits of this campaign.
It is a joint campaign – you will see, for example, at tab S13, some of the retainer of the media organisation. And at page 300, for example, under item 10 it is made clear it is a joint campaign. So here we have an example of a campaign, which we would submit is a valuable message protected by the Constitution, the message being, a group of people together urge you to consider X, not simply, different people urge you to consider X. Obviously, there are economies of scale in doing it together as a single campaign yet, under the present law, that campaign becomes unlawful.
Just before your Honours adjourn, I was going to give you the final piece in the evidence which was in volume 5 at page 1885 which is tab 112. If we could go to page – within this report of the Committee, if we could go to page 1945, this is the final recommendation on third‑party campaigners; 1947, they are aware of what happened in 2015, they can see the large spenders. In paragraph 7.18, the Committee was given details on Union NSW, breakdown of costs, and then the critical recommendation 1948; 7.20 has the privileging behind it; 7.22 supports the recommendation but says:
The Committee is of the view that, before implementing this change, the NSW Government should consider whether there is sufficient evidence that a third‑party campaigner could reasonably present its case with an expenditure cap of $500,000.
That is against a background knowing that the change in the law will shut down forms of speech seen in the 2015 election recommendation never taken.
KIEFEL CJ: The inquiry was never made or there is no evidence that it was.
MR GLEESON: No evidence of any inquiry and nothing in the parliamentary record to say that this recommendation had even been considered or addressed.
EDELMAN J: You read 7.20 as being privileging by itself and not being motivated in any way by a drowning out concern, do you?
MR GLEESON: No, that would be too narrow a reading, your Honour. It is very brief but it has got “privileging” in the second sentence. The reasonable amount of money, that has a whole lot of masks behind it and what probably still is behind it, is because they are accepting the panel’s recommendations they are carrying over the panel’s idea that somehow third‑party campaigners spending $1 million drowns out parties who are spending up to 20 or more million dollars.
EDELMAN J: It is an aim of privileging and also avoiding drowning out.
MR GLEESON: Probably, because it is endorsing a panel. But could it rationally be a fear of drowning out? No, when they have not addressed the obvious problem staring them in the face.
KIEFEL CJ: We will adjourn then. Thank you, Mr Gleeson.
AT 11.16 AM SHORT ADJOURNMENT
UPON RESUMING AT 11.30 AM:
KIEFEL CJ: Yes, Mr Gleeson.
MR GLEESON: Thank you, your Honours. Your Honours, that recommendation of the committee which was at page 1948 of volume 5, as I have mentioned, was for the government to consider whether there was sufficient evidence that a third‑party campaigner could reasonably present its case within this expenditure limit. In other words, being practical, taking the sorts of campaigns we saw from 2015, the Nurses’ Campaign and the Not for Sale Campaign, on the face of it that type of campaign would now become unlawful if this change were made and so an investigation into whether you could reasonably present your case would either go down the perhaps very unlikely limb that those campaigns involved over‑expenditure and they could have been done for a much lower price ‑ quite an unlikely proposition ‑ or we want to shut down those type of campaigns, the more likely proposition.
What you see from the only material in Parliament which is at tab 115 and then 116 is that in the second reading speech in the Assembly at page 2105 at about line 20 there is an assertion by the Minister that:
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.
So, with no evidence pointed to to answer the question, there is simply the conclusory assertion of reasonableness with no exploration of matters I have raised, and in the reply speech which is at page 2111 at about line 15 – in fact, I might just pick it up on the foot of the previous page, the speech says:
The panel examined the amount of the current cap closely, and found that it is too high. Indeed, the current cap of more than $1.2 million is the same as the cap for parties that only contest Legislative Council elections.
That was its rationale. Then, there is the assertion that the cap:
allows a third‑party campaigner to reasonably present its case –
Again, no evidence. The paragraph ends with:
Again, this implements a specific recommendation of the expert panel.
It is being presented to Parliament as if the panel has given this the tick and all issues are being explored and so we reduce the cap and not the slightest examination of the matter that the panel said and the committee said did need to be looked at.
Your Honours, in terms of our outline that brings us down to paragraphs 6 through to 9 and could I make some submissions then on the law commencing with ACTV which is at volume 2, tab 11. In terms of the particular law under challenge we would emphasise from page 124 to 127 that the law applied during the election period which is defined in footnote 71 and commenced with a broad prohibition upon all use of the broadcast media during that period for election purposes subject only to a series of limited exceptions.
The exceptions on page 126, firstly section 95A(1) was an exception allowing the broadcast of news and current affairs, comment or talkback radio. Then, at the foot of the page, 95H, the free time, which as the Court knows over the page 90 per cent was allocated to the incumbent parties. A small amount was available for independents and certain discretions remained in the Tribunal’s hand for the balance of it.
Now, that allowed the Chief Justice at the foot of 128 to characterise the effect of the provisions as a whole as excluding the use of radio and television as a medium of political campaigning except insofar as those exceptions might apply. His Honour said at 129 in the middle paragraph this was a severe impairment of the freedoms:
previously enjoyed by citizens to discuss public and political affairs and to criticize federal institutions. Part IIID impairs those freedoms by restricting the broadcasters’ freedom to broadcast and by restricting the access of political parties, groups, candidates and persons generally to express views with respect to public and political affairs on radio and television.
So, at the heart of the burden, what his Honour had identified was the exclusion from this media of not just the parties and the candidates but persons generally and his Honour took that point a little further on 132 in finding discrimination, particularly noting at point 5, the:
the provisions regulating the allocation of free time allow no scope for participation in the election campaign by persons who are not candidates or by groups who are not putting forward candidates –
His Honour gave some examples of what now – through New South Wales prism – are third‑party campaigners:
Employers’ organizations, trade unions, manufacturers’ and farmers’ organizations, social welfare groups and societies generally are excluded from participation –
We would make this observation. Clearly, one strand in the judgment is the discrimination imposed by the law in the allocation of the free time where the third‑party campaigners are totally excluded from that free time. Another strand of the discrimination is that the incumbent parties are given preferential access to the free time. More than that, it is no answer to say that those discriminated against may be left with access to some other means to seek to express their views. When his Honour at 138 to 139 expressed the general principles in the passage the Court is very familiar with, his Honour returned at 139 to the notion:
The efficacy of representative government –
This is point 4:
depends also upon free communication on –
political:
matters between all persons, groups and other bodies in the community. That is because the individual judgment, whether that of the elector, the representative or the candidate –
depends upon the:
public discussion in the media of the views of all interested persons, groups and bodies and on public participation in, and access to, that discussion.
So, the starting point, we would submit, which is there, is the notion that the whole range of views should be available to the electors when they are making their choice. There is no privileging, at the outset, to the political parties or candidates as having views which, in some way, need to be heard more or need to be at the centre of the debate. So, that strand, we submit, is very strong in his Honour’s judgment.
When his Honour came to validity at 144, it is correct, as some of your Honours put to me this morning, that his Honour assumed the purposes were the high purposes advanced by the defenders of the law and then proceeded to find the invalidity at the next stage of the analysis and that is certainly an available way in which this case could be resolved. So, his Honour’s analysis on 145 and 146, we would commend as fairly close to the mark in terms of ‑ ‑ ‑
KIEFEL CJ: That is a balancing exercise.
MR GLEESON: It is a balancing exercise but, with the further assistance of McCloy and Brown, one can probably see in his Honour’s reasons, each of the elements of that structured proportionality because his Honour is concerned with each of those elements as well as being concerned with the evident discrimination and concludes at 146, point 8 that this could not be seen to introduce a “level playing field”. Importantly, his Honour says, just:
because absolute equality in the sharing of free time is unattainable, the inequalities inherent in the regime –
are not necessarily:
justified or legitimate.
That really is fairly close to the mark in respect to our case.
GORDON J: The point he really makes at 145 at the end of the second‑last paragraph is that:
The Court should be astute not to accept at face value –
the assertions that, in a sense, the balance has been struck or that the right provision has been adopted, in the sense that it is up to the person seeking to uphold the provision to somehow justify the level. I mean, here on one argument it is possible that we are in a worse position because we have Parliament identifying - or at least the joint standing committee - that there is some question about the level and yet there is no, as I understand your argument, nothing before the Court that explains the assertion at face value as to why the level has been chosen.
MR GLEESON: Nothing before the Parliament and nothing before the Court now, even though there is the possibility that there could have been evidence which was produced here even though not there, that might have plugged the gap. So neither gap has been plugged. It actually raises one of the slight conundrums of this case. In one sense it is actually very like Unions (No 1) because you know what this law is doing and you know the effect of the amendment and you know it is shutting down forms of speech which were previously lawful and on their face, apparently valuable and protected by the communication and you simply do not know why it is doing that other than to shut down that protected speech.
Now, on that analysis of it, it is very similar to why the provisions failed in (Unions No 1). There are assertions by the defenders of the law that there are high purposes involved here, preventing corruption, reducing the influence of money but just nothing, nothing in the end beyond what this law does which is to shut down previously permissible protected speech. So, that is one possible way of analysing the case. Another way, which perhaps ‑ ‑ ‑
KIEFEL CJ: You mean there is no rational justification because there is no factual substratum ‑ ‑ ‑
MR GLEESON: There is no ‑ ‑ ‑
KIEFEL CJ: ‑ ‑ ‑ to say on what basis the purpose is being pursued. Is that how you put it?
MR GLEESON: That is one way in which the case can be seen. There are probably two or three ways the same argument is being put. That is one way, that there is no rational justification because the missing link which they knew they needed has simply been discarded as irrelevant and so whatever will be said and will be said later today ‑ ‑ ‑
KIEFEL CJ: Well, we do not know that, we do not know that it was never looked at.
MR GLEESON: No, no.
KIEFEL CJ: We just know that we do not have any information.
MR GLEESON: We know that you do not have information on it, the Court does not and we know the Parliament was not given such information and if anything the Parliament was told this is all okay because the panel gave it a tick and the committee gave it a tick when clearly the tick had a qualification attached to it. So, that is one level at which it can be approached, that in the end it is impossible to see the rational justification.
Another slightly different way of putting it is to say, to the extent you are advancing these high purposes, one cannot get from the text of the law or from the context the rational connection of how it is that reducing the cap for TPCs does anything valuable to prevent drowning out or reducing the influence of wealth.
Another way, as I put to your Honour the Chief Justice this morning, is really at the necessity limb, that even if assumptions were made favourable to the earlier stages in the analysis, this is the case where the alternative measure, being the previous measure, has not been shown in any way not to work and at that point the analysis fails.
If one got to the final stage of the analysis, which your Honour Justice Nettle dealt with in Brown or McCloy ‑ your Honour knows better than I ‑ your Honour is one of the few Judges that has had to grapple with the final stage, adequacy in the balance - then even if the Court were persuaded to Mr Dunning’s submission that you have to find gross disproportion or - and your Honour made some discussions about that in order that the final step is consistent with the initial method, in this case the final step in fact becomes tolerably easy because on the one side we say, we know what this law will do. It will shut down valuable political speech of a sort which we have seen in New South Wales without any evident difficulty occurring from that speech of any sort at all.
So that is on one side and that is the burden and we are now examining the extent of that burden and we are examining the fact that it is a direct and substantial attack on the centre of the freedom and the purpose here of bringing to account of the applied freedom is then at the heart of that side of the equation. We then say what do we have on the other side and why are we doing this. What is it that is being advanced in terms of the ostensible proper purposes by shutting down this speech and it is pretty hard to find what is even there on the other side of the argument.
EDELMAN J: That drives you straight back to the purpose argument.
MR GLEESON: I do not want to anticipate too far the submissions of others but it is probably New South Wales’ key response to our case which I should address now. If one looks at New South Wales’ approach to proportionality, which is in their submissions at paragraphs particularly 44 through to 47 and perhaps at 48, at every point New South Wales is trying to put back into the equation a view on purpose which has significant problems with it. At paragraph 44 of the “suitability” stage they say:
to achieve the legitimate end of levelling the playing field for the reasons given above at [32]‑[39].
Paragraph 33 has the notion in it that:
That is a matter of policy choice.
That, with respect, is wrong. At 35:
A legislature can always revise its laws –
That is true but it may be subject to constitutional constraint. Then 37 is getting close to the heart of it:
Consistently with the expressed object of establishing a fair electoral expenditure scheme (s 3(a)), the impugned cap on TPC electoral expenditure is calibrated to be lower than the electoral expenditure cap that is applicable to political parties that field sufficient candidates in an election. The selection of differential caps pursues ends that may be described compendiously as “levelling the playing field” or ensuring “equality of opportunity”.
What do they mean by that? At 38, what they in fact mean is that third‑party campaigners do not have the constitutional position of candidates and parties of being able to stand for Parliament and form government. That is true as an observation. So their level playing field in the end seems to be one which reduces to: those who stand for Parliament and seek to form government must be given, or may be given, and secure the dominant role in the discourse of ideas. One sees at 39 that they talk more about functional differences, and 40 talks about functional differences.
Up to paragraph 40 it seems the defence of the law is on this constitutional/functional privileging notion. Then at 41 to 42 there is a very brief attempt to suggest that there may be practical differences which could justify the caps. The problem with that is there is nothing in 41 to 42 which addresses the evidentiary gap as to why there is something to do with these practical differences that led to you reducing the other cap by 60 per cent. That, as it were, hangs in the wind. So returning to 44, these are the purposes that supposedly drive suitability. We then get to “necessity” and there is a plea that:
There is no one right balance –
At 46 it simply that “we are people who like the old balance, that is what our case reduces to”. Nothing in 45 to 46 addresses the evidentiary problem. Then in 47, when they come to “adequacy in balance”, they say:
Provided the Court is satisfied that the cap selected is not such as to effectively exclude a TPC from participating . . . then the Court should not descend –
any further. That, we submit, does raise an erroneous approach to adequacy in the balance or indeed any step in the process. This seems to be a notion: we can set the cap as low as we like as long as you are not effectively excluded from any communication in and around the campaign.
EDELMAN J: That is because that is premised upon the purpose that, as you put it, discrimination is permissible.
MR GLEESON: Yes.
EDELMAN J: So all of this weighing exercise comes back again, does it not, to the question of whether that purpose is legitimate or illegitimate?
MR GLEESON: I would not dissent from your Honour. We are seeking to submit that this case will be resolved earlier in the list of questions rather than at the end.
EDELMAN J: I realise that, but as this is an alternative submission does it not need to be premised upon the alternative basis? In other words, if you are wrong that what you say is a common view of the purpose being unconstitutional then is that supposedly permissible purpose adequate in the balance or one that is suitable?
MR GLEESON: But that is a difficultly that we are faced with this part of the argument. It is truly in the alternative. Your Honour is correct. We have trouble even trying to formulate the bounds of the punitive purpose we are meant to deal with. But it seems to be particularly from these words “effective exclusion”. That gives us a clue to what it is.
What it is saying is any system which gives the parties and the candidates the primary position, because they are the ones who stand for Parliament, it is permissible, as long as you have not effectively excluded others altogether from the debate, therefore ‑ but as long as they are given a little bit of speech, as long as they can perhaps spend enough to send out a mail letter, that is their constitutional role in the debate of ideas secured by section 724 ‑ 64 at 128. Now, that is ‑ we are, yes, we are attacking that as being wrong.
Now, if it were right, if that is what we are putting on the opposite side of the equation, then one sees the difficulties in doing the final stage because, in fact, we are now on that view, because the Court says at the final stage we have taken into account the importance of the purpose, we have apparently two purposes pulling in rather different directions.
We have the implied freedom purpose, which is we should be having as much debate, as many ideas as we can including from the people who are most likely to provoke new thoughts in the electors and on the other side we have a view of the Constitution that we should have as little new ideas as possible from anyone other than the political parties and the incumbents.
Now, maybe that just tells you they cannot – those two views of the Constitution cannot sit together and in that sense the case would then be resolved at a much earlier stage in the analysis. It is almost impossible to weigh two totally conflicting views of what – of what the Constitution is about.
Your Honour’s question does raise an issue that is in the submissions, or perhaps to be advanced today, about McGinty. This is partly in the Commonwealth’s submissions. But there is an appeal to the notion that the various Parliaments around the nation are secured constitutional flexibility to design electoral systems in the way they think best and there should be a creative tension permitted in that process and therefore one does not rigidly constitutionalise the forms of available systems of direct choice.
Now, that is true and we accept that from McGinty, but where the Commonwealth, and perhaps New South Wales, seeks to go from that is to say well you get the same flexibility when you are doing the exercise of restricting the speech which is guaranteed by the implied freedom. We would submit that is an erroneous carryover from quite a different problem.
So, your Honours, to complete ACTV, I would simply give the references in the judgments of Justices Deane and Toohey at pages 172 to 175 with the same recognition of the importance of players other than simply the parties and the candidates. That is particularly seen in – at page 175 and, to somewhat similar effect Justice Gaudron at 220 to 221 and Justice McHugh at 236 to 239.
Now, your Honours, could I more briefly deal with Unions (No 1). I have mentioned some parts of it in passing, volume 5, tab 24. In the judgment of the plurality between paragraphs 26 to 30 – and, particularly, paragraph 30 – we would rely upon the observations concerning the breadth of the communications protected and the breadth of the persons whose speech is protected. What was said there can be mapped onto the importance of third parties being permitted to speak in the debate.
At paragraph 41 and also at paragraph 53 I draw attention to those as two paragraphs where the Court was discussing, perhaps obiter, the provisions which are of the character now before the Court because the Court was discussing the caps on donations and the caps on expenditure and noting that what was not in issue was their connection to the general anti‑corruption purposes. Of course, that was right based on what was in issue in that case.
At paragraph 51 – which was the point I mentioned earlier – was that, on analysis, section 96D could not be seen to do anything calculated to promote the achievement of the legitimate purposes. That is, as I have submitted, one way in which the present case is available to be approached. A similar approach was taken in paragraphs 62 to 64 in respect to the aggregation provision. Again, it could not be seen to do anything to further the general anti‑corruption purposes of the Act.
Your Honours, could I just observe there at 63, the judgment made in observation which was treated as along the way to the ultimate point, but it is an observation somewhat pertinent to the aggregation provision in the present case because there seems to be an idea behind this aggregation provision that we cannot let two TPCs, or perhaps a TPC plus anyone, join in a common message because perhaps that is in some way an illicit communication – for example, two unions are joining so, perhaps, that is some form of illicit communication.
But, of course, TPCs may be of very different characters and sources and one can actually imagine some of the communication shut down by the aggregation provision could be most valuable because of their surprising nature. One might have two TPCs, otherwise regarded as not friends, who come together and say we both campaign for X. The fact that the Australian Medical Association, for example, might choose to join with, let us say, the Business Council, to campaign on issue X, that could be an incredibly valuable message in its own right protected by the Constitution and yet the aggregation shuts that down.
Now, in your Honour Justice Keane’s judgment – I mentioned this morning the emphasis on the discrimination and I am drawing attention perhaps to paragraphs 140 to 148, particularly, paragraph 148 was the one I mentioned a little earlier.
Next, could I go to McCloy, which is volume 3, tab 18. Could I first refer to paragraph 2B, with the summary of the test and particularly the reference to the suitability stage of the test. Footnote (79) indicates that the judgment considers the finding in Unions NSW (No 1), at least on the first provision, as a law that fell at the suitability stage of the test. There are certain other paragraphs of the judgment which analyse Unions NSW in that fashion.
So I draw attention to that as a way in which Unions NSW (No 1) is to be understood, namely, the law may have passed compatibility testing but failed at the very first step of proportionality testing. We would simply put for consideration that an additional, not inconsistent way of reading Unions NSW (No 1) is that the law actually failed at the compatibility stage because, in the end, one could not find either a purpose or a means which were legitimate other than the bare suppression of protected speech. But, on either view, in the present case we rely upon the purpose at the first stage, if not at the stage of suitability.
Now, I next wanted to draw attention to the discussion between perhaps paragraphs 31 and 46 about some of the purposes which might be compatible with the functioning of representative and responsible government and, in particular, the analysis of ACTV at paragraph 43.
I do note that in paragraphs 44 and 45 – and this takes up your Honour Justice Keane’s observations in Unions NSW (No 1), there is reference to the law as it has developed in Canada in Harper and like cases. Could I put a short form submission on the Canadian law and then if it is developed further, as it may or may not be, deal with it in reply rather than develop the full argument at the moment, your Honours?
Our short form argument is that there is no doubt that in general terms what is described as the egalitarian model or equal participation and so on, which has been recognised as legitimate in Canada, is given support in this judgment and in your Honour Justice Keane’s judgment as what may be a legitimate purpose within our system. So there is no quarrel with that. Indeed, the Canadian decisions are here used as a bolster to the ACTV principle and they seem to be compatible.
The short form submission is what the Court has not done and should not do is take the particular approach to third party expenditure caps, which has found favour to the majority in Canada but not in the very powerful dissenting judgment of Chief Justice McLachlin.
KIEFEL CJ: Well, do you say that the references in this Court to Harper do not adopt the ratio so far as it concerns the particular provisions there?
MR GLEESON: Yes, that is the short submission.
KIEFEL CJ: Your argument would adopt the approach, if it were necessary, of the dissenting two judges?
MR GLEESON: Yes, and to the extent that this case proceeds through the full stages of proportionality testing we would commend that the approach of the dissenting judges is actually quite a powerful and illuminating example of how one does each of those stages and there caution that there just was not sufficient evidence to justify the shutting down of the speech of the third‑party campaigners rings very heavily in the present case and, in fact, echoes what Chief Justice Mason said in the paragraph your Honour Justice Gordon raised with me. So, that is the short form submission on Canada.
Now, paragraph 55 is one of the examples of the Court analysing Unions (No 1) as falling down at the stage of rational connection to purpose. The one other – perhaps the only other matter I wanted to emphasise from McCloy is this theme that – and it comes up in at least – it comes up in a number of judgments.
At paragraph 45 which I was on a little earlier, the way in which the risk to equal participation is framed is quite precise. It is the risk to equal participation posed by the uncontrolled use of wealth warranting legislative action to ensure and enhance the practical enjoyment of popular sovereignty. So what we are looking at is the risk of there being so much wealth deployed within the political process that other voices simply cannot be heard. That is the risk of the multi‑million or multi‑billion dollar super PAC drowning out other voices which simply cannot be heard in the process.
KIEFEL CJ: But is that not to recognise that there may be warrant at some point in different circumstances, where as I said before it is a legitimate purpose.
MR GLEESON: I accept that, your Honour. Coming back to the topic I perhaps should have left alone was – the only reason I was coming back to it was to try and just emphasise that when one sees language like “drowning out” it can often mask two rather different ideas. This is the true – this, we submit, is the true drowning out evil. Is there such an uncontrolled use of wealth that you have simply prevented a range of other voices being heard? That is the true drowning out.
It is never drowning out to say we have designed a system where the political parties can spend 10, 20 or more million and we want to cut the cap for the third party campaigners. Why? Because their views might actually have some success with the electors, so that paragraph I drew attention to for that point.
Also, your Honour Justice Gageler’s judgment at paragraph 182, there is a similar expression of what this purpose is and so at one stage of the analysis we are saying let that be the putative, permissible purpose of the law. This law is never – is not rationally justified as advancing that purpose. To similar effect your Honour Justice Nettle at ‑ ‑ ‑
GAGELER J: Mr Gleeson, is it implicit in your argument as you have just framed it then that it is incumbent on those who seek to support the law to advance the justification, that is, is there an element of persuasive onus, perhaps even evidentiary onus that is implicit in your argument?
MR GLEESON: Well, it is not necessary to our argument because on this case the argument is on the basis of question raised and no evidence, irrational answer. But were it necessary to decide that we would certainly wish to submit that at least in a case like the present where the burden is on the core of communication and a number of the judgments, whether through structure, proportionality or otherwise, have recognised that the justification may need to be compelling in such circumstance, it is not difficult to see an onus on the defender of the law to come forward and say this is exactly why we are doing it and this was the evidentiary base we then had or we now tender to you to examine our approach. If they can produce nothing at all then one can approach it by saying you have failed a burden of justification.
EDELMAN J: Would you accept that if the $500,000 cap had been present in the 2011 amendments that there would have been anything further that would need to have been said beyond that which justified the initial caps?
MR GLEESON: No, I would not accept that, your Honour, because if it had been there at the outset and that was all we had, we would have had a scheme where – we have given you the ratios in the outline – the big parties are allocated somewhere between 23 and 46 times the cap of the third‑party campaigner and the minor parties are allocated two and a half times their cap. That stark disproportion on its own would have raised, we submit, the most evident question – is this simply suppression of disfavoured speech?
Now, if there were nothing to, in any way, justify that relativity then there would have been a problem with that law. Yet, that is not the record we have because they have told us at the beginning, we are deliberately setting you next to someone who is functionally similar to you. So, as one example where the Court has dealt with the question of onus, I would refer to Brown at paragraph 131 in the judgment of your Honour the Chief Justice, Justice Bell and Justice Keane, stating that in deciding:
what is proportionate or reasonably appropriate and adapted, it is for those supporting the impugned legislation to justify any of its measures which burden the freedom.
So were it necessary to decide, we would argue that is correct.
Just completing the references on the wealthy donors point, it is your Honour Justice Nettle at 227 of McCloy – which adopts what Justice Keane said in Unions – and that, we submit, is the way to approach this purpose if it is to be a permissible purpose.
When your Honours are considering how the Constitution protects speech from these third‑party campaigners, it is not difficult to think of history – since Federation – reflected in the Commonwealth statute book and the decisions of this Court – where third‑party campaigners as they now would be called have played a prominent role in effecting substantial change in the law.
We would give several examples. Firstly, the Commonwealth Franchise Act 1902, a world‑leading Act extending franchise to women was, as we know, substantially driven by campaigns of people who would now be called third‑party campaigners. It was their ideas and the infusion of those ideas into the debate and, finally, the response of the parliamentarians that produced a radical change in the law.
I only want to give two other examples. In Brown itself - that is Brown v Tasmania - we see evidence of political protest on environmental issues being the catalyst for governments throughout the country to take measures to protect the environment. Of course, the Australian Conservation Foundation has seen its way into this Court as another example of what would be regarded as a third‑party campaigner.
Your Honours, could I just conclude the legal part by inviting your Honours to review the other matters in paragraphs 628 that I have not yet covered? I have really covered 678 and 679 – and the only addition to 679 is the reference to Betfair or the importance of there being evidence for the Court’s consideration which rationally justifies the conclusion that the threat is real and the response required.
GAGELER J: That is the onus of proof point.
MR GLEESON: Yes, yes. Your Honours, I think in passing perhaps – well, hopefully not too randomly I have covered what I want to say about points 10 and 11. I have made our submission on purpose and the only thing we could add on purpose to your Honour the Chief Justice’s questions is the way we put the matter in our written submissions at paragraph 39.
I have put the submission on proportionality. Can I just really finish then on section 35 and treat that as a separate issue? So, if your Honours could go back to section 35 and one looks at how it operates. The starting point would be there would need to be an agreement under subsection (2) which could be formal or informal:
with the other person to campaign with the object, or principal object, of -
promoting or opposing someone’s election. So, if one third‑party campaigner as in 2015 comes up with an idea for a good campaign, realises that it is going to cost $600,000 or $700,000 and says to another third‑party campaigner should we agree to do this as a joint campaign because that will be a more effective, a more efficient and a more valuable message, at that stage they have an agreement which is potentially putting them in peril of breach.
Now, when does the breach actually occur? The breach occurs if you act under the agreement to incur electoral expenditure that exceeds the applicable cap for the third‑party campaigner. New South Wales has raised an alternative submission that we have a great deal of trouble getting out of the section that somehow this does not mean what it says and, in fact, you can still have two caps rather than one cap. It does not seem to work that way.
Once you act under the agreement to incur expenditure of $500,001 if that is the joint expenditure, you have at that point exceeded your cap and you are in breach of the law. So the provision shuts down that sort of speech and so then has these effects. It criminalises the conduct of the third‑party campaigner but not another party to the agreement who is not a third‑party campaigner.
It only applies to third‑party campaigners and there is no equivalent provision if two parties, e.g. in coalition, run a joint campaign for $500,001 which is not an unlikely event. Indeed, another example might be a minor party in the Upper House seeking to do something jointly with a major party in the Lower House as a quid pro quo for what might happen once the major party gets into government.
KIEFEL CJ: But is this is simply meant to operate – if the principal provision applying the cap on expenditure is valid, is there not simply an anti‑avoidance provision?
MR GLEESON: It is more than an anti‑avoidance provision. The anti‑avoidance provision is the general one in section 144 and that applies to everyone and everything. We point to that as the alternative measure which deals with any anti‑avoidance problems.
KIEFEL CJ: Section 144 would capture section 35, would it not?
MR GLEESON: It would capture some things within section 35, but section 35 catches a whole lot of things that section 144 does not.
KIEFEL CJ: Could you give me an example?
MR GLEESON: If two third‑party campaigners come together and say “We want to run a joint campaign costing $600,000 and we will pay for that half‑half”, so each of those third parties is within their applicable $500,000 cap, what this is saying is because that joint campaign has cost one dollar more than a single cap you cannot conduct it at all.
So the joint campaigns which were used in 2015 that I showed the Court which were then lawful are now unlawful under this provision. There is no anti‑avoidance in those campaigns. There, each person is still only spending up to their cap but it is the co‑ordination that allows the additional message to be heard.
KIEFEL CJ: I may have spoken too quickly about section 144. It has a mental element which is missing in section 35, in the offence. Section 35, on one view, though, is simply a provision rendering the caps efficacious, is it not? It is limiting the party to the cap applicable to them.
MR GLEESON: In the example I have given, a $600,000 campaign, and each third‑party campaigner says “I will pay half of the cost” so each is paying $300,000, let us assume that that is their only expenditure, they will have each stayed within their cap and they will otherwise have acted lawfully under section 33.
KIEFEL CJ: So you say its effect is to further reduce the cap.
MR GLEESON: The effect is to further reduce the cap. But by saying that, for a particular type of message, the moment your message is one that is being communicated jointly with someone else, even though you are still within your cap, that message is unlawful.
GAGELER J: Mr Gleeson, if the third‑party campaigner cap were set at a level that was necessary to prevent the drowning out of other voices in the campaign then what is wrong with a provision that prevents two voices joining together where, joining together, they will be able to drown out others? If the cap is a good one, what is wrong with applying it to two persons who join together to have the same effect?
MR GLEESON: The answer is the discrimination; that it is only applied to certain participants in the process.
GAGELER J: Not applied to parties.
MR GLEESON: Everyone.
GAGELER J: That is your point.
MR GLEESON: Not applied to parties, not applied to candidates. That is the point, so two parties are in coalition.
EDELMAN J: It has the effect that two third parties would be able to run $300,000 campaigns each but not a joint $600,000 campaign.
MR GLEESON: Yes, and so it shuts down the message which comes from the joint campaign, in total costing the same but having that very additional valuable message behind it that two people are urging you to do this and potentially, as I say, with economies of scale, it may mean that you can do for $600,000 a campaign that otherwise might cost two lots of $400,000, if you had to act separately.
So the vice is the targeting of - why the third‑party campaigners, why not any person acting in concert with anyone else to incur electoral expenditure above the individual cap and there is only one answer to that which is this was seen to be an extra stick to apply to the third‑party campaigners to further marginalise their role in the debate.
GAGELER J: Within subsection (1) does the other person include a party - for the third‑party campaigner to act in concert with a party would the provision apply?
MR GLEESON: The short answer will be yes for one or both of two reasons. One is if the party is regarded as a person. The second is the party will be acting through the party agent who will sign the piece of paper and, indeed, it has to work that way because it is certainly designed to catch Union (No 1) agreeing with Union (No 2). So a union has to be a person to make it work.
If it were applied to every participant in the process, then the question would be slightly different, which is can you justify shutting down joint messages even though the total amount being spent is the same. So there is that element to it, but we have the core element. They just have targeted one group of people because they do not want their joint messages.
KIEFEL CJ: Do you advance the same argument proposition that you advance in relation to section 29(10), which is that there is no basis shown for this?
MR GLEESON: Yes. There is no basis shown and the – I will not go back over it but the only material is that you have already seen which is the fears about super PACs. The assertion of privileging says effectively because we want these people in the margins this is an extra way to put them in their proper place. So, your Honours would see in paragraphs 13 and 14 that we then put this argument as on the basis the provision fails at the compatibility stage but if not it would fail relatively soon on in the proportionality analysis.
Your Honours, to the extent proportionality is done on a – any basis other than a structured basis, our short submission is one will get to the same result. All I want to say further about that was that I think Mr Dunning is the only party urging the Court to revisit some law in this area so that will be a matter for him to develop but when you read ‑ ‑ ‑
KIEFEL CJ: The Solicitor‑General for Queensland is consistent.
MR GLEESON: For Queensland. Yes, he is rigorous and persistent.
KIEFEL CJ: This has been pointed out before.
MR GLEESON: He told me he was asking for an extension of time, your Honour - I made that up. But I would say about Mr Dunning’s urgings that when he is asked – when he approaches the question of what is he urging in place of structured proportionality it is interesting what he says. If I could go to his submission at paragraph 41 he seems to be arguing that in a case where the burden is slight then you need go no further than suitability. Well, we would submit that is of no assistance in the present case.
KIEFEL CJ: That was an argument put recently in another case.
MR GLEESON: Yes. We are not in the territory of slight burdens. He urges you not to be unduly granular. He then, in 42, says you should leave the:
‘domain of selections’ to the legislature –
He correctly notes in footnote 77 that that statement at paragraph 82 of McCloy was in the context of necessity testing, not in the context of the entire exercise. So it is not clear whether Mr Dunning wants margin of appreciation brought back in in some fashion. But that is probably enough I need to say about Mr Dunning.
The only final matter I wanted to say about the other submissions, the interveners – at least in‑chief – was that your Honours will have observed that although at least some of them ostensibly intervened to support New South Wales and some of them make arguments about issues that are in the case, none of them expressly defend privileging. That is the first point. The second point is none of them explain how the arguments they are advancing can be turned into a defence of this law.
So, in particular with the Commonwealth, the high point of the Commonwealth’s submissions is paragraphs 40 to 45. The Commonwealth, carefully, at the end of paragraph 40 say they are not making an argument based on privileging, so that appears to be a difference from New South Wales. Then they indicate four cases where, as they say in paragraph 45, in an appropriate case a lower cap might be justified. Your Honours will see nothing in those paragraphs to even seek to argue that any of those four matters have been instantiated into the present law.
EDELMAN J: Mr Gleeson, just before you sit down, one matter about relief. If you were correct that section 29(10) and section 35 were invalid, given the interrelated nature of the caps and the operation of Division 4, would the appropriate relief be for those provisions to be invalid but to
leave the remainder of the provisions operative, in other words, to remove caps only for third parties?
MR GLEESON: That is the relief we seek ‑ special case book one, page 181. That is all we seek.
EDELMAN J: Yes.
NETTLE J: Would it be supposed that the Parliament would intend it to operate that way if the caps on the third parties were to go?
MR GLEESON: It is difficult to say yes to that, your Honour.
NETTLE J: It is rather, is it not?
MR GLEESON: Yes. There are two possibilities: at least they go and, depending on the view of severance, it all goes and Parliament starts again. May it please the Court.
KIEFEL CJ: Yes, Mr Solicitor.
MR SEXTON: If the Court pleases. Your Honours, I propose to deal with the expenditure cap imposed on the third‑party campaigners in relation to electoral expenditure by sections 29(10) and 33(1) and Mr Kirk will deal with the limits imposed by section 35.
I do propose to talk about section 29(10) in a sense because that is the one that proposes the financial limitation and I do propose to look at it in the light of the way that the Court has approached challenges to statutory provisions on the basis that they contravene the implied freedom of communication, but before I start that exercise, can I make a number of introductory points – five introductory points in fact.
The first is that the plaintiffs’ submissions really look, we would say, at section 29(10) very much in isolation. It is only one part of a comprehensive scheme for the regulation of the electoral process in New South Wales. That regulates political donations and electoral expenditure, including caps on political donations, caps on electoral expenditure, the disclosure of political donations and electoral expenditure, and public funding for political parties. It is to be noted that caps on political donations are applicable to donations made to third‑party campaigners, as is the requirement of the disclosure of electoral expenditure. Section 29(10) is simply one aspect of a comprehensive scheme in this area and we would say it needs to be considered in the light of that scheme as one aspect of it.
Secondly, the plaintiffs do not say, of course, that there should be no limits on electoral expenditure for third‑party campaigners. Their complaint is about the relative level of limitation in this case. The plaintiffs also do not say that there should be no differentiation in the caps on electoral expenditure that are imposed on different actors in the political process. It is evident, we would say, from the plaintiffs’ acceptance that the predecessor legislation, which also differentiated between third‑party campaigners and political parties and candidates, was appropriate.
So this raises a question, we would say, in the context of the implied freedom of whether it is not a matter of legislative choice to decide on the appropriate figure for limitation, provided that that limitation is not so low as to be seemingly designed to prevent the meaningful participation of third‑party campaigners in an election campaign and assuming that there is a legitimate purpose.
KIEFEL CJ: How do we assess whether it is not so low as to not reasonably enable them to have a voice?
MR SEXTON: In a sense, your Honour, these are – I will come to the question of the evidence, as it were, but the figure in this case is $500,000 and we would say that particularly when one looks at the expenditure which is in evidence in relation to third‑party campaigners for the 2011 election and the 2015 election, we would say that $500,000 is a substantial amount and that the Court would be able to accept that that could not for a moment be said to try and shut out third‑party campaigners from meaningful participation in an election campaign.
In some ways, this is the real point of dispute between the parties and to some extent it involves a question of the demarcation between legislative and judicial power, the role of the Parliament and the role of the Court in the sense that if one accepts, as we put forward, that this is a substantial amount and does allow meaningful participation, then the question is what inquiries could the Court make in terms of other amounts that might be available. In other words, if the plaintiffs say that a $1 million was satisfactory and $500,000 is not, what is to be said about $600,000 or $800,000? We would say that ‑ ‑ ‑
KIEFEL CJ: You are not encouraging the view that the Court should make such inquiries.
MR SEXTON: No, on the contrary, your Honour. That is right.
KIEFEL CJ: I did not want to misunderstand what you were saying.
MR SEXTON: No, no, exactly, your Honour. So, what we are saying is that it is not an inquiry for the Court.
KIEFEL CJ: No.
MR SEXTON: And, that is why ‑ ‑ ‑
KIEFEL CJ: But, there is a question raised and open on the evidence here from the committees which were the caveat on the committee who recommended the reduction which was that the New South Wales Parliament make an inquiry and that was not done. So, what is there left to explain the choice of one half of a figure that was thought to be adequate and reasonable beforehand?
MR SEXTON: There are two answers to that, in a sense, your Honour. There is a general answer and a – in a general sense, Parliament often does not – and is not, of course, required to, as it were – table evidence for the legislation that it proposes to enact. It often ‑ ‑ ‑
KIEFEL CJ: You mean some inquiries might have been made?
MR SEXTON: No, no, I will come back to the specific matter, your Honour. But, it often legislates to deal with what it sees as future problems or as a more acute form of an existing problem which might be true in this case. That is the general answer, in a sense, that it is – Justice Gageler raised the question of onus. It seems to us that the notion of the Parliament having some sort of evidentiary onus or legislation that it enacts would be a very unlikely concept to be accepted. As to this specific case, what the expert panel did was to make the recommendation and to say that it could be looked at after the 2015 election. The expert panel, of course, was not there to look at it after that time.
As it happened at that 2015 election, as my learned friend has taken you, the nurses spent $900,000 of it, with almost 1,500 television advertisements. I mean that was one thing, for example, that the Parliament knew after the report of the expert panel. The expert panel was not ‑ ‑ ‑
KIEFEL CJ: What are we supposed to infer that was thought that the nurses were drowning out, the voices of the parties?
MR SEXTON: No, your Honour. Well, it is just simply that the amounts went, I think, in 2011 from $1.5 million to $5 million‑odd in 2015. It is a rather significant increase from one election to the next. I am just saying, your Honour, that that was something that the expert panel did not have before it but that the Parliament would have had before it.
KIEFEL CJ: Well, the amount spent, $900,000, tends to suggest that at least some third‑party campaigners were spending almost to the limit of the previous limit.
MR SEXTON: That they exceeded the $500,000 limit.
KIEFEL CJ: Well, the limit was not in place then, was it? They had a $1 million limit.
MR SEXTON: Yes, the $1 million limit. That is right.
KIEFEL CJ: They were spending almost the entire of that amount.
MR SEXTON: Yes, that is right. Well ‑ ‑ ‑
KIEFEL CJ: So, that was known to the Parliament.
MR SEXTON: Yes, but the point of these provisions is to limit to some extent the amount that is going to be spent by third‑party campaigners. That is the point of these provisions, as the point of the whole scheme is to limit the influence of money in the political process by ‑ ‑ ‑
KEANE J: Is that right? Is not the point to limit the amount of influence of third‑party campaigners relative to the influence of candidates and parties?
MR SEXTON: That is part of the scheme, your Honour. Everyone has limitations under the scheme, including parties and candidates.
KEANE J: That is right, and the purpose of these particular provisions, 29(10) and 35, is to impose further limits on third–party campaigners that are peculiar to them relative to other participants in the process.
MR SEXTON: Indeed, your Honour, and I will come to the question of the role of parties and candidates. But we accept quite freely that there is a difference, we would say, between parties and candidates on the one side and third‑party campaigners on the other, and that is why there is a distinction between them in the legislation.
EDELMAN J: The height of the difference between you and the plaintiff is whether it is legitimate to act upon that purpose.
MR SEXTON: In one sense that is right, your Honour. We would say historically that there has always been that distinction and we would say it is an obviously legitimate purpose. That is not the purpose, we would say, of the legislation. It is one way in which the legislation is implementing its purpose. Its purpose is to limit the influence of money in the political process and the overall scheme is designed to do that by placing limitations on all forms of expenditure and donations.
One way in which that is done, admittedly as part of all that scheme, is a differentiation between political parties and candidates on one side and third–party campaigners on the other. That is because we would say historically there has always been that difference. I see the time, your Honour.
KIEFEL CJ: Yes, thank you, Mr Solicitor. We will adjourn until 2.15 pm.
AT 12.46 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.15 PM:
KIEFEL CJ: Yes, Mr Solicitor.
MR SEXTON: If the Court pleases. Your Honours, just before the adjournment, I was making the submission that legislation is really not a matter for evidence that the Parliament is entitled to legislate with respect to what it sees as future problems, and that in the context here of a comprehensive scheme limiting expenditure in various ways in the political process and assuming the legitimate purpose of limiting the influence of money in that political process, that it is not possible to say that on its face, what is a substantial amount here that can be spent during the campaign period by third‑party campaigners would not allow their meaningful participation in that campaign and in that political process.
KIEFEL CJ: You mean it is incumbent upon the plaintiff to show because otherwise you do not deny an onus of proof of kind ‑ I will use the term loosely ‑ but you say it falls on the plaintiff.
MR SEXTON: Well, in one sense I think that is right, your Honour. Yes, to demonstrate that there is, as it were on the face of it, something that would not allow the meaningful participation because of the amount that is being – the amount that is being fixed.
KIEFEL CJ: Would that be consistent with this Court consistently saying that any burden on the implied freedom must be justified?
MR SEXTON: Well, I will come to the question of burden which, as your Honours know, we say does exist ‑ ‑ ‑
KIEFEL CJ: Just focusing on the word “justified”, it would tend to imply logically that it is justified by the proponent of the law that burdens the freedom.
MR SEXTON: Well, your Honour, as I say, I do not shrink from the notion of justification but it is a question of how it is done when you have got, as I say, a comprehensive scheme and when you have got a substantial figure in terms of the expenditure. That, in one sense, we would say, amounts to justification. Of course, it would not be in any case where there is a burden, it needs to be, as it were, explained but we say that is done certainly here by the legislation.
Having said that about those questions, in any event, your Honour, can I just however say two things about the two reports which deal with the recommendation of $500,000. Your Honours have been taken to these but the special case book at volume 4, and it is page 1419, it is where the expert panel makes the recommendation of $500,000 and says that they believe it:
to be a sufficient amount that strikes the right balance between the rights of third parties and those of parties and candidates –
They then go on to say:
It would be appropriate to review the level of the third party spending caps after the 2015 election, if it becomes apparent that they are causing concern.
It is not entirely clear what would happen there. This was – perhaps the panel envisaged that this would be put into legislation before the 2015 election, although the timetable would have been very short. So I just wanted to point out that that seems to be not entirely clear but they made the recommendation and they were quite clear about that.
GAGELER J: They made that recommendation against the background that you can see graphically at page 1413, and that is that nobody was spending $500,000 in the previous election, so it would not be any impediment to third‑party campaigners as they had been campaigning till then to reduce the cap to $500,000.
MR SEXTON: That is so, your Honour. This was after a lot of submissions and consideration of materials. They seemed to be saying there that the $500,000 is a figure that strikes the right balance and that by definition they thought the previous figure was too high. I appreciate what your Honour says about the expenditures but they presumably could take into account the fact that those parties or other parties could quite easily increase expenditures that had been made up until that time.
EDELMAN J: They did take that into account. They say this is still well above the approximately $400,000 that the NRMA, the highest‑spending party, spent.
MR SEXTON: Yes, but at the next election, of course, some of those figures were quite significantly increased. I should say this. Let me put it this way. There is no magic, we would say, about the figure of $1 million which was in the earlier legislation. The question for the Court now is whether the figure of $500,000 fits within the principles relating to the implied freedom of communication.
As I say, the earlier figure is really in many ways not relevant to that inquiry. And, as I say, the panel has made that recommendation. At that time, it is true that the expenditures were generally under $500,000 but the question really is whether $500,000 is in the context of this scheme and in terms of the relativities within the scheme is something that allows meaningful participation by third‑party campaigners. And, as we say, it is a substantial sum by any standards. And I will come to some of the aspects of that.
GAGELER J: Mr Solicitor, just while you have got that page open, 1419, three paragraphs above the one that you have taken us to there is a statement that:
Spending caps should not be set so low as to prevent third parties from having a genuine voice in debate.
Would you accept that as a minimum requirement for compatibility within the implied freedom?
MR SEXTON: Your Honour, that is why I say that it is a question of meaningful participation and it is why I said, I think just before lunch, that it is not we would say a useful inquiry for the Court as to what the amount should be once meaningful participation is assumed or guaranteed. But if one had a figure that was on its face designed really to, in effect, close off this kind of participation because it was so low, then of course I accept entirely what your Honour says.
GAGELER J: Why does it have to be on its face?
MR SEXTON: Well, in terms of the legislation one can only look at the amounts, really, the figures. There is an aspect of relativities but it is a question of the figures. To some extent, it is a question of – the substance in question, I mean, that is why I say $500,000 can hardly be, I think, said to be anything but a substantial sum.
GORDON J: Is that an answer, given that passage you took us to on 1419 in this sense, that the sum that you describe as substantial is a sum which is set by reference to the third‑party spending in the last election? It was 2011, absent the data of 2015, absent the query by the joint standing committee itself about whether or not it gave them meaningful participation.
MR SEXTON: I will come to that, to the joint committee in a moment, your Honour. But, the ‑ ‑ ‑
GORDON J: I mean, to characterise it as substantial is really just a descriptor. It does not take it any further, given the assessment that has been made on 1419, is it?
MR SEXTON: Even in the case of the 2015 election, most of the third‑party campaigners were – it was a sufficient sum for them. Many were underneath it and some were close to it. There were a couple of ‑ I think two or three that exceeded it in 2015. But, your Honour, the whole point about the scheme is that it is designed to limit expenditures and donations. And, of course, there will be some individuals and some entities that would like to donate more and would like to spend more. But, if there is going to be a scheme, there has to be some limitations on it. And, that is why I say that it may well be that no matter what limitation was proposed, there would be some entities who would want to spend more. That, perhaps, goes without saying.
Can I just on that same – Justice Gordon has raised it – the joint committee, it is at volume 5 of the special case book at page 1948, and you will see paragraph 7.22 that it is true the committee said that it was:
of the view that, before implementing this change, the NSW Government should consider whether there is sufficient evidence that a third‑party campaigner could reasonably present its case with an expenditure cap of $500,000.
If we just emphasise the word “reasonably” and say that ‑ ‑ ‑
GORDON J: Is that the same as “meaningful participation” that you put to us in the submission earlier as a justification for the substantial sum?
MR SEXTON: I think so, your Honour.
GORDON J: So, I am to read the recommendation as being one that, before it is decreased, you must make an assessment about whether or not there can be meaningful participation at a level of $500,000?
MR SEXTON: No, your Honour. As I said, the notion of decreasing is, as I say, something of a false issue here. The question is whether the $500,000 provides a reasonable – an opportunity to reasonably present a case or to engage in meaningful participation.
NETTLE J: And, what you say is that because it is a $100,000 more than the $400,000 NRMA spent in 2011, it is ex facie reasonable?
MR SEXTON: I do not think I have to say that, your Honour.
NETTLE J: You do not say that?
MR SEXTON: I do not have to say that. It is true that may have been a factor in relation to the expert panel but what we say is that if it is a substantial sum and it is in the context of this overall scheme, then it is a question of, really, of legislative choice as to what that figure would be.
NETTLE J: Do you go as far as to say that, given those figures – and that is what NRMA spent – there is no reason to doubt, in the absence of contrary evidence, that it leaves a reasonable amount for the TPC.
MR SEXTON: Well, certainly one can perhaps draw that inference at that time.
NETTLE J: But not now?
MR SEXTON: Well, yes. I do not think we have to draw that ‑ well, the question is, if one looks at the 2015 figures which are the last ones we have got, overall that would suggest that the limit enables reasonable participation.
GORDON J: To pick up the point that Justice Gageler made about the last report, the preceding page of this joint standing committee has expenses close to $1 million for three of the entities, third‑party campaigners listed. It is apparent what their concern was when you get to the recommendation at 7.22, is it not?
MR SEXTON: Well, as I say, of all the third‑party campaigners, that was true for three of them and, as I say, the point about limitations is that it will have an impact on some entities.
GORDON J: And you accept that what is set out in the recommendation as a concern by the joint standing committee that the amount was going to be insufficient.
MR SEXTON: No, it simply asked that the government should consider the recommendation, and presumably before the legislation was introduced because of the figure that is in the legislation it can be assumed that that occurred.
GORDON J: No, I do not quite understand that submission. Could you put that again? I may have misunderstood it. Are you saying that we are to assume that they did make those inquiries?
MR SEXTON: Well, that they consider the question. By definition, if the figure is in the legislation, it was something that the government considered as to whether it was an adequate figure.
KIEFEL CJ: In what form did this consideration take place?
MR SEXTON: We do not have any evidence of ‑ ‑ ‑
KIEFEL CJ: Well, how can you say the government considered it?
MR SEXTON: Well, because it is in the ‑ ‑ ‑
KIEFEL CJ: You mean some person selected a figure.
MR SEXTON: Well, because it is in the legislation, your Honour, we are entitled to assume, I think, that it is not picked at random, that there was a ‑ ‑ ‑
KIEFEL CJ: Well, we know the $1 million was not picked at random because it is said that it was picked for relativities and it was not plucked from the air.
MR SEXTON: Well, I will come to the question of relativities. Well, we know, in fact, I suppose, that the figure here was selected because it was the recommendation of the expert panel.
KIEFEL CJ: And no more?
MR SEXTON: Well, after that panel had conducted quite a lengthy and detailed inquiry. The panel was composed of one person from each side of politics and a chairperson from neither side.
EDELMAN J: So the purpose of choosing the figure must be the purpose of the panel then?
MR SEXTON: Well, I am not sure that that necessarily follows. It certainly was where the figure came from that has gone into the legislation, but it does not follow that the government would necessarily accept automatically that, but it happens to have accepted it in this case.
Can I just say – could I deal with – I am just dealing with a couple of preliminary points, your Honours, that was the second of them in a sense, before I get to the question of the way in which we deal with the implied freedom.
Can I just deal very quickly ‑ and it is the third point that the – in their submissions, but not orally today, the plaintiffs referred to various expenditures on government advertising. It is the kind of advertising that is engaged in by all governments around the country, typically provides information on health, safety, community services. We simply say that it has no relevance to the issue of whether the limitations on expenditures for political purposes contravene the implied freedom and there are examples of that advertising ‑ I will not take your Honours to it ‑ in volume 2 of the special case book at 842.
Now, the fourth preliminary point. The plaintiffs point to the difference between the limitation on electoral expenditure in the current legislation and in its predecessor legislation, and there seems to be a suggestion that once a limitation figure is inserted in legislation that it is, in effect, almost immune from later revision.
So, there seems to be a suggestion that the predecessor provision is an obvious and compelling alternative simply because of its pre‑existence and that the legislature must proffer some change of circumstance or new evidence to justify a departure from it. I will not take your Honours to the reports, but there is reference in McCloy 197 by Justice Gageler and at paragraph 233 by Justice Nettle to the notion of health necessities in third legislative imperatives and Justice Nettle again in Brown about the notion of dealing ‑ at 288 to deal prophylactically with matters of public concern. So, again I have already suggested that the notion of the legislature dealing with future problems or with problems that it has already dealt with, but it now feels need to be dealt with in a different way.
So we would say that that argument by the plaintiffs really serves to constrain the domain of selections or choices that the legislature can make and assumes some merits of the prior legislative model that we say should not be assumed.
Now, fifthly, and lastly in terms of preliminary matters is something that is very much at the heart of the plaintiffs’ case, which is the distinction that is made by the scheme in terms of entitlement to electoral expenditure between candidates, most of whom are of course aligned with political parties and the parties themselves on the one side and third‑party campaigners on the other side.
It is true that the Constitution makes scarcely any reference to political parties, in the same way that it makes no reference to the Cabinet for example, but in 1901 political parties played the major role in the various colonial legislatures. Chief Justice Gibbs noted in McKenzie v The Commonwealth (1984) 57 ALR 747 at 749 that Members of Parliament were organised in political parties long before the Constitution was adopted. And parties had provided the operating framework for the Westminster system of government in the United Kingdom throughout the 19th century, arguably for much of the 18th century as well. And the expert panel pointed out that political parties and candidates are, they said:
directly engaged in the electoral contestant, and are the only ones able to form government and be elected to Parliament to represent the people of New South Wales.
That is at special case book, volume 4, page 1416. Realistically, the Executive Government will come from the political party that has most candidates elected in the Lower House at the federal level. And the enactments of the legislature will generally reflect the policies and decisions of the governing party.
Justice Gummow noted in McGinty v Western Australia (1996) 186 CLR 140 at 258 to 259 that:
The interests of that party political system and of the established parties in a sense have come to be identified with those of representative government itself.
And your Honours will be familiar with section 15 of the Constitution, which now incorporates a reference to political parties in terms of the replacement of senators after it appeared that in the 1970s that what seemed to be a convention about the replacement by someone of the same political party had fallen into disrepair.
And the existence of the implied freedom to ensure that the people have a free and informed choice as electors, we would say, assumes that the choice is one between candidates for office and since 1901 at the federal level and earlier in the colonial period largely between candidates from political parties.
Chief Justice Gleeson noted in Mulholland v Australian Electoral Commission – I will not take your Honours to it – (2004) 220 CLR 181 at paragraphs 20 and 29. His Honour said that:
the practical significance of political parties in the operation of the democratic process –
existed and that this was particularly so in a system of compulsory voting. It might be noted that the expenditure limits for parties under the legislation are not confined to existing organisations so that new parties can be set up at any time. And, of course, as any member of the community is entitled to stand as an independent candidate for the Upper or the Lower House.
KIEFEL CJ: Mr Solicitor, the plaintiff, as I understood it, accepts that the structure and relativities of the previous Act, the EFED Act, takes no issue with them. Is that not to accept that there is a basis for some differential treatment, having regard to the differences between parties and candidates and third‑party campaigners? But that is not really the issue here, is it? The issue here is, accepting all of that, how is a reduction of the expenditure for third‑party campaigners, which alters the relativities even further, how is that justified? I did not understand some basis for differentiating between parties, candidates and third‑party campaigners really to be an issue.
MR SEXTON: Your Honour is quite right. It really goes back to, I think, the point that I was making at the start which is that there is – it is a mistake, we would say, here to focus on the previous legislation. It is a question of the existing legislation and whether the amount that is fixed for third‑party campaigners allows meaningful participation et cetera. I will not keep repeating that.
KIEFEL CJ: Although you would be happy to accept, I assume, the concession that the structure and relativities of the previous legislation are unassailable.
MR SEXTON: Well, your Honour, that the legislature is entitled to distinguish between parties and candidates on one side and third‑party campaigners on the other which is what happens in this existing legislation as well. There has been some change in that relativity, as there have been in other aspects of the legislation given that it is, as I say, a scheme that regulates in a financial sense almost all aspects of the electoral process. Again, there is no, we would say, particular magic about the – not only about the previous legislation but about the relativities that were within it. The real question is whether the present amounts allow that kind of participation.
So, I just say that the underline that we say there is a fundamental difference between the role of the candidates and parties in an election campaign. I understand what your Honour has just said. But most of the candidates and parties will approach the electorate with a broad range of policies whereas third‑party campaigners could take a single issue and devote the entirety of their electoral expenditure entitlement, for example, in a media campaign devoted to that issue or in a limited number of marginal seats.
There is a cap of $24,700 for third‑party campaigners in relation to each electoral district, section 29(12), so it would be possible for one third‑party campaigner to, for example, select the 20 most marginal seats in the Lower House and target those within the cap of $500,000. It would be possible for 20 different third‑party campaigners to spend $500,000 in one marginal electorate in circumstances where a party and its candidates are limited to $184,400. It might be thought that these examples are unrealistic but in that 2015 figures it will be recalled that there were 36 third‑party campaigners and only 19 political parties had been registered.
Now, your Honours, those are, in a sense, the preliminary matters. Can I just come to the question of the implied freedom in terms of the way the Court has approached in recent times challenges to legislation on this basis. So, the first question is whether the freedom is burdened by the legislation in question. We have accepted that there is an effective burden imposed by 29(10) and 33(1) although we would say that in contrast with what might be described as, I suppose, the public order cases like Brown, Preston, Clubb, legislation regulating the funding of and the expenditure on election campaigns is arguably designed to enhance the overall freedom of political communication by limiting the impact and influence to particularly wealthy players in the political process.
Nevertheless, we accept for these purposes that there is a burden on the implied freedom. It is neutral as to content in this case, and of course it only operates in the context of an election campaign and the months immediately preceding that campaign, depending on how one defines the start of an election campaign now.
The relevant provision, of course, in the area of restrictions that affect communication in the conduct of elections, which is something that the implied freedom is particularly concerned with, but we would say that the burden is not substantial in this case because, even if it be accepted that political communication is in some circumstances reduced, it is not meaningfully impeded because third‑party campaigners are not closed out of the public debate surrounding elections, despite my learned friend’s notion of their being shut down, not we would say at $500,000, as is the case here.
The next question is whether the purpose of the law is legitimate in the sense that it is compatible with the maintenance of the constitutionally prescribed system of representative and responsible government. One legitimate purpose, we would say, of the legislation generally, of which section 29(10) is one component part, is to limit the impact of organisations and individuals with disproportionate wealth and resources on election campaigns. That is done by limitations both on political donations and on electoral expenditure.
I think your Honours have been taken to the objects of the legislation. Section 3(c) is to help prevent corruption and undue influence in the government of the State. Paragraph (a) is to establish a fair electoral expenditure scheme. We would say that the reference to undue influence reflects an intention not only to prevent the buying of influence by donors but also the exertion of disproportionate pressure in election campaigns by way of electoral expenditure, in this case by third‑party campaigners.
There is reference to this concept in McCloy – it is at paragraphs 36 to 37 of the majority judgment, and Justice Gageler at paragraph 181 – which arises out of an office holder’s dependence on the financial support of patrons which compromises the expectation that the public power will only be exercised in the public interest.
So, these kinds of provisions, we would say, can be characterised as having that same anti‑corruption purpose because they reduce the risk that political parties and candidates become – or feel indebted to certain campaigners on account of what might be thought to have been spent to secure an election result. This was something that was mentioned, of course, and was of consideration for the expert panel.
The majority in McCloy, at paragraph 43, referred to the judgment of Justice Bastarache in Harper v Canada(Attorney‑General) [2004] 1 SCR 827, volume 5 at tab 25 of the joint book. But, perhaps I will just quote briefly and say that where – and this is the majority quoting in McCloy from that decision that the premise for the egalitarian model of elections is equal opportunity from dissipation and wealth is the major obstacle to equal participation. As Justice Bastarache then said:
the state can equalise participation in the electoral process in two ways –
One of which is to:
restrict the voices which dominate the political discourse so that others may be heard as well.”
So, the plaintiffs really argue that differentiating between certain sources of political communication is an illegitimate purpose because it is incompatible with the free flow of political communication between all persons and groups but, as was said again by Justices Bell and Keane in Brown at paragraph 92, there is:
No decision of this Court holds that a law effecting a discriminatory burden is, for that reason alone, invalid –
and we have pointed out here what we say is the basis for the difference between parties and candidates, on the one side, and the third‑party campaigners on the other side.
So, as to the question of suitability in relation to section 29(10) – that is, whether there is a rational connection between what we say is a legitimate purpose and the means chosen to achieve it ‑ again, to quote the expert panel, third‑party campaigners, they said, 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 acknowledged the panel that the potential for third‑party campaigners to run well‑funded and influential campaigns on niche issues and noted some concern about the potential for increasing the active third‑party campaigners to undermine the role of parties and candidates in election campaigns. That was the basis for their recommendation, the figure of $500,000 which they took the view, would allow campaigners to:
have sufficient scope to run campaigns to influence voting at an election ‑
I think, your Honours, the approach is also reflected in the second reading speech of the Minister, volume 5 of the special case book at 2105, where the Minister said that:
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.
There has been some discussions already of onus but in a sense here the plaintiffs assert that the Court should infer that section 29(10) does not give third‑party campaigners sufficient scope to participate in and to influence election campaigns.
There is no reason, we would say, for why the Court would draw that inference. There is no basis for that in the materials before the Court. The contrary view was reached by the expert panel and by the legislature in enacting the legislation so it is not clear, we would say, how one could make that judgment in these circumstances.
GAGELER J: Mr Solicitor, are you going to come back to Harper v Canada.
MR SEXTON: I was not, your Honour, but if your Honour has a question, I can ‑ ‑ ‑
GAGELER J: I was just wondering how much you are taking from it.
MR SEXTON: Well, we certainly take from the majority judgment the fact that this is clearly a legitimate purpose, as we have put it already, in terms of this legislation and that, in that particular case, the court did not seem to take the view, as it were, that the legislature had to look only at the past but it could look at the future in terms of how it was going to address what it saw as a problem.
GAGELER J: I was really wanting to ask you about paragraph 110 within the majority judgment and to ask whether you would accept the inquiry indicated in that paragraph to be an inquiry that is required at some stage in the second limb of the Lange analysis.
MR SEXTON: Your Honour, to demonstrate that it must impair the infringed right as little as possible?
GAGELER J: Yes.
MR SEXTON: Well, the entire scheme, we would say, is the legislature’s judgment, that how one balances the question of freedom of communication in the electoral process with limitations designed to actually support that process by limiting the amount that can be spent in a whole range of ways. So that it is a judgment by the legislature that the scheme is designed to infringe freedom of communication as little as possible, bearing in mind that if one is going to achieve that purpose, that there have to be some limitations.
GAGELER J: Where in the record do we find an indication that the legislature of New South Wales has made a judgment that the $500,000 cap minimally impairs freedom of communication?
MR SEXTON: Well, of course it will not be in the statutes, your Honour, but it accepted the recommendation of the panel who made that judgment. As I say, I can reverse the question and say in a sense in the overall scheme and given the amount involved why would one assume or conclude that there was unreasonable restriction on freedom that it exceeded what was necessary to achieve the objects of the overall scheme? Does that answer your Honour’s question?
I should just point out that if one goes to paragraph 8 of the decision in Harper that there seem to be a very large disproportion between the limits for political parties and for third parties in that particular scheme which was however, nevertheless, upheld by the court.
I think I have got to the question of necessity, just tracking through those headings. In our submission, assuming that there is a relevant difference which, as your Honour the Chief Justice points out, the plaintiffs accept between the role of candidates and parties on one side and third parties on the other and that the cap is substantial, not illusory, we would say that the issue of necessity does not really arise in this kind of case because it is open for the legislature to choose a figure that accords with the legitimate purpose of the legislation. So I think I said before, whether $400,000 or $600,000 would be an ideal figure is not really a useful inquiry for the Court.
If the influence of third‑party campaigners is going to be limited then a cap on their electoral expenditure is the only means of achieving that end. The precise figure, again we would say, is one of legislative choice. Your Honours will recall that in Mulholland the question was whether there was a requirement of registration for a political party of 500 members. In that case Justices Gummow and Hayne, at paragraph 163, said that that was a question of legislative choice whether it was 500, 700 or 400.
BELL J: Mr Solicitor, accepting the emphasis you place on legislative choice, in a circumstance where one has an existing scheme, the purpose of which is to ensure that money does not permit voices to be drowned out, and that scheme it is not suggested with its $1 million cap for the third‑party campaigner has suffered from that vice, when one accepts that one is looking at justifying a burden in this instance on the speech of the third‑party campaigner and there is nothing to suggest that a cap of $1 million suffers the vice that is sought to be addressed by this legislation and in circumstances where the Parliament has before it material showing that some third‑party campaigners expended at the previous election an amount considerably in excess of $500,000, does not that pose an issue about the necessity, amongst other things, for this scheme?
One understands your general point about legislative choice but here we are not operating in a vacuum. We are looking at a scheme that existed, that the Parliament has decided to modify. Do you see my point?
MR SEXTON: I do, your Honour. I think what we would say is that that presupposes in a sense that the previous legislation and the figure of $1 million was an amount below which participation could not be guaranteed.
BELL J: Is it not more a question of if there was no suggestion that that particular cap was operating in a way that distorted the level playing field and the opportunity for all voices to be heard, then why would one halve it?
MR SEXTON: Because in this case, after hearing a great deal of evidence and submissions, the expert panel – as I say, quite a lot of political experience on that panel – decided that this would be a more appropriate figure, and that was accepted by the government.
So, that is why I say that, of course, one could have higher figures and in the case of some of the third‑party campaigners, always higher figures, but the question is what would strike the balance and if one looks at, as I say, because the expert panel did not have access to the 2015 expenditure figures but again all but three of those third‑party campaigners would have been within the $500,000 cap - why I say it is a question of legislative choice is because it involves that kind of balancing between the limits of the expenditure and the ability of third‑party campaigners to participate in the electoral process.
There can always be arguments about whether the figure might be slightly too high, slightly too low, et cetera, but that is, we would say, not in a sense a useful inquiry for the Court. That is why it is a mistake, in our view, to focus on the previous legislation. There is new legislation. It has a comprehensive scheme and one aspect of it – only one aspect of it is the provision in relation to third‑party expenditures. As long as that figure is not designed to – inherently not designed to prevent those third‑party campaigners participating significantly in election campaigns, we would say that that amounts to a legitimate legislative choice.
The third‑party, the Executive – the expert panel made reference to some of the developments in the United States. My learned friend, Mr Gleeson, said well this is not a case where super PACs are operating but the fact is that there are entities and – on both sides or supporting both sides of politics and even individuals with very considerable resources if they wanted to involve themselves in these sorts of third‑party campaigns and the legislature, we would say, does not have to wait until these sorts of
developments occur necessarily in Australia before it is able to deal with what it perceives to be a threat to the electoral process.
Now, finally, as to the question of adequacy and balance, again, if it be accepted that the legislation suitable to achieve a legitimate purpose then the issue here is whether the cap under section 29(10) is disproportionate to that legitimate purpose and, in a sense, it picks up perhaps a question that came from Justice Bell but really repeating the point that was made in relation to the question of necessity that once it be accepted that the figure chosen is not designed to constitute an effective or substantial prohibition on that kind of expenditure then it can hardly be said to be disproportionate to that legitimate purpose that has already been established and whether a slightly higher or slightly lower figure might be preferable is not really a question for examination at this stage.
I have already noted that the burden does not go to the content of the communications and it only operates during the pre‑election period. So, in many ways we would say that the burden is not substantial. As against that, the purpose of the provisions is compelling because they seek to enhance the system of representative and responsible government by establishing a fair and transparent electoral expenditure scheme and in terms of the objects of the Act helping to prevent corruption and undue influence in the electoral process in New South Wales. Unless there are any other matters, your Honour, I will ask Mr Kirk to deal with section 35.
KIEFEL CJ: Yes, thank you, Mr Solicitor.
MR KIRK: Your Honours, I propose to deal first with the construction of section 35; secondly, with its purpose; thirdly, with the extent of the burden imposed on the freedom; and fourthly, with justification. Can I ask your Honours to turn, please, to section 35 which is in volume 1 of the authorities book at page 51? Of course, my learned friend, Mr Gleeson, took your Honours here this morning.
The actual offence, as my learned friend, Mr Gleeson, correctly identified is created in subsection (1) – or, I should say, the unlawfulness, which is made an offence by other provisions. The unlawfulness is a form of action, namely, acting in concert with another or others to do something, namely, to incur electoral expenditure in relation to certain matters at certain times. But that, of course, has to be read together with subsection (2) which elucidates what “acts in concert” means. When one reads the two provisions together a person will only – or a TPC – will only offend subsection (1) if there is an agreement:
(whether formal or informal) –
if the TPC has acted under the agreement – that flows from the words at the end of the first line of subsection (2):
with another person if the person acts under an agreement –
So, they must be acting pursuant to the agreement, and the agreement must have:
the object, or principal object, of –
(a) and (b). Now, pausing there, we would suggest that the reference to “the object” when read in context with the reference to “principal object”, must mean sole object because principal is then the lower standard. So, it is with the sole object or principal object of – and to summarise then, either:
having a particular party, elected member or candidate elected, or
(b)opposing the election of a particular party, elected member or candidate.
So what section 35 does not prohibit, for example, is any type of agreement which is other than focusing on supporting or opposing the election of a party member or candidate. For example, it does not apply to any type of issues campaigning which does not fall within (a) or (b). For example, if one wanted to have a joint campaign between TPCs or others about climate change or reducing electricity prices or so forth, that would not be prohibited even though in some circumstances a secondary object or an effect, depending on the context, may be to increase or decrease support for one side or the other.
Of course there are issues of degree here. To say, “You know, we must bring, say, electricity prices down” may well be understood in some particular political context as implying support for some political party. But if that is not the sole or principal object of the agreement then it is not captured. It does also have to be the object of the agreement. That is the kind of notion – in one sense it does not strictly make sense but it is a section 45 of the Competition and Consumer Act sort of sense, namely, one looks to characterise the objects of the agreement by reference to what is agreed between all the parties. So what is in the mind of some particular participant is not enough to characterise that as the object of the agreement.
GAGELER J: Mr Kirk, we had an example in the special case of the “NSW Not For Sale” campaign.
MR KIRK: Yes.
GAGELER J: Are you saying that would not be caught by this provision?
MR KIRK: It might and it might not. If your Honours – I forget quite where it was but it was in volume 1 ‑ tab 12. If your Honours go to tab 12 in volume 1, starting around page 274 - if your Honours look at 275. I do not want to get too bogged in giving rulings ex temp on particular ads, but broadly speaking that ad by itself probably would not be captured. If your Honour turns over, in fact, to just the next page, to page 277, that probably would be, assuming there was an agreement to that effect, because it says in terms “Put the Liberals last”. Assuming there was an agreement to put out such an ad that would be seen as much like opposing the election of a particular party. It is all going to depend on the context.
KIEFEL CJ: Is that not the implication from what appears at 275 - “Don’t vote for the Liberals”?
MR KIRK: It might be, which is why one gets into issues of degree and context, and that is not unusual with these sorts of statutory provisions. I am going to take your Honours shortly to part of the expert panel saying it is notoriously difficult to seek to regulate these sorts of issues. I forget what the children’s game is where you press down one button here and another button comes up there, but that is a bit like how it is regulating electoral campaigning because parties and participants are constantly seeking to find ways around what is in the scheme to promote their message and spend funds.
GORDON J: Just so I can test this proposition, if you took the advertisements which appear at 275 and onwards, one could not run 274 on its own and say that in the same sort of advertising campaign, that is all right but the rest are not.
MR KIRK: That might well be so, yes.
GORDON J: But once you have a campaign then it is caught by the provision.
MR KIRK: Only if the agreement has the character caught in 35(2), so one has to look to the content of the agreement, we would say. We accept there are issues of degree there. I note this ‑ ‑ ‑
EDELMAN J: Why would an ad like that not be electoral expenditure then, if you are correct?
MR KIRK: Why would it not be electoral expenditure?
EDELMAN J: If you are correct that “NSW Not for Sale”, without mentioning any particular party or any particular candidate, is an issues campaign then it would also follow, would it not, that it is not electoral expenditure because the definition of “electoral expenditure” in section 7 ‑ ‑ ‑
MR KIRK: It is broader.
EDELMAN J: ‑ ‑ ‑ requires it to be:
in connection with promoting or opposing, directly or indirectly, a party or the election of a candidate –
and so on.
MR KIRK: No, then it goes on.
GORDON J:
for the purpose of influencing ‑ ‑ ‑
MR KIRK: Correct, and one of the points I was about to seek to make is that in the written submissions of the plaintiff it is suggested, well, this distinction we have drawn (a) puts a gloss on the statutory text and (b) is a distinction without a difference. So, as to (a) putting a gloss on the statutory text, it is plain that Parliament has drawn a distinction between what is dealt with in section 35 about the targeting, supporting or opposing a party member candidate on the one hand and on the other, what I think Mr Gleeson called the second limb of electoral expenditure in section 7(1), namely:
influencing, directly or indirectly, the voting at an election –
and the latter is not in contrast to section 7(1) picked up by section 35. Hence, the distinction we seek to draw.
EDELMAN J: So your submission then is 35(2)(a) and (b) are concerned with, effectively, directly having a particular party, elected member or candidate elected but are not at all concerned with “influencing, directly or indirectly, the voting at an election”?
MR KIRK: Recognising there are issues of degree, as I have said, the Parliament has drawn that distinction, it is an understandable distinction and that distinction and what they have done in 35 is only the former and not the latter, hence our point.
EDELMAN J: How does one then have a political party or member or candidate elected without influencing the voting at the election?
MR KIRK: Well, because as my learned friend, Mr Gleeson, said this morning - and this is an answer also to his second point that it is a distinction without the difference - my learned friend said this morning that one could well, if I might paraphrase, one could well imagine - he said that one could readily contemplate communication falling within what he called the second limb of section 7(1) but not the first and he went on to say and that would be a very valuable message and my recollection of the examples he gave were things like talking about climate change and so forth and there is a reference I think in the outline to marriage equality.
So, one could well understand, for example, how a third‑party campaign might wish to insert into an election debate a particular point which, as my friend said, may be both sides are ad idem on but someone says you should not be, and so it is put into the debate.
So, my learned friend is right, with respect, to say that that might be a very valuable message and it is not captured by section 35. What that illustrates is that section 35 has a narrower focus, namely targeting of particular parties, elected members or candidates and so that then leads to the question of why there would be such a provision.
It comes from the suggestion of the panel. So, if I take your Honours back to the panel report in volume 4 of the case book at tab 110, starting at page 1421 on the top right‑hand side, your Honours will see the heading, “Aggregation”. I just wanted to note the heading. Then if I could ask your Honours to turn to the next page, 1422, just under line 10 there is a reference to academic experts giving evidence and Dr Tham gave evidence, who has written on electoral expenditure. He referred to some difficulties with aggregation provisions in place in Canada and the UK, and I will not read that out, and then at line 20 indicated that he considered that the provision in 205H of the ACT Act was:
a better approach for dealing with co‑ordinated election campaigns.
That is what section 35 is based on as my learned friend, Mr Gleeson, correctly said. Jumping to line 30:
Professor George Williams and Professor Twomey also supported modelling an aggregation provision for New South Wales on that of the ACT.
They agreed that New South Wales should introduce one. They acknowledged that it would be difficult to enforce.
Professor Twomey said that ‘it [collusion] is extremely hard to prove. Similarly, Professor Williams said that ‘you do need an aggregation rule, very clearly. You have just got to be realistic about how far it can go. There is no perfection in this area’.
He spoke about the need for a disincentive. That ties to what I referred to a couple of minutes ago that it is difficult to regulate this area and it is well known to be difficult to regulate the area. Is this perfect? Probably not. Around the bottom of the page, line 50:
The Panel supports provisions to aggregate the spending of political parties and their associated entities and believes that they can be introduced in New South Wales without falling foul of the Constitution, as did the earlier attempt at aggregation by the O’Farrell government.
So that is a reference to section 95G(6) and (7) which was held invalid by this Court in Unions (No 1). The panel went on:
The main purpose of such provisions is to prevent the party spending caps being circumvented by the establishment of front organisations. As noted above, an ‘associated entity’ is defined in the ACT legislation to include an entity that is controlled by a party, or that operates completely or to a significant extent, for the benefit of a party . . .
In the Panel’s view, any New South Wales definition of ‘associated entity’ should specifically exclude organisations that, in Professor Twomey’s words, exist independently of parties and have their own constituencies and political views.
If your Honours could keep that open and go back to the Act. That recommendation which ended up being recommendation 32(a), sounds in section 30(4) of the Act at page 47 of the first authorities book. So, this is an aggregation provision. It is not perhaps a perfect piece of drafting but, in effect, one aggregates expenditure most relevantly of a party and of an associated entity of the party and also aggregates expenditure of an elected member and an associated entity of the member where associated entity is defined at page 23 in section 4 as meaning:
a corporation or another entity that operates solely for the benefit of one or more registered parties or elected members.
So, reflecting the panel’s recommendation, this means of parties cheating their caps, namely, setting up associated entities which are just so closely tied as to operate for the benefit of one or more of them or members doing the same is caught by this aggregation provision in section 30(4). Then, if we can go back to page 1423 of the panel’s report to about line 25:
The Panel also supports the introduction of a provision similar to section 205H –
and I will let your Honours read to the end of that paragraph. The reference at the end there of the paragraph:
to maintaining a fair and balanced electoral contest and the integrity of the expenditure caps generally ‑
harks back, we think, to inter alia, page 1416 in the previous chapter that your Honours have been through but can I just draw to your Honours’ attention between about lines 30 and 50 under the heading “Concern about increasing prominence of third‑party campaigns” there is a discussion of US‑style PACS or Super PACs, and if your Honours could read to the end of the page. We emphasise the middle bit between the two quotes, around line 40:
Stakeholders cautioned that without appropriate restrictions, political parties could use third‑party campaigners as fundraising proxies to raise election war‑chests, as with PACs.
Or as the virulent ones or the strong ones in the US are now known, “Super PACs”. So, without such a provision as section 35 it would be possible for a TPC to raise and spend money independently of the party, or a party, or a candidate, or a member, but that is in coordination with them. In that way, effectively extend the money‑raising ability because the party can say, all right, Ms Smith, you have given me your $6,000 but now you can go off to that TPC over there and you might want to see our friends over there and also to circumvent the expenditure limits of both parties and candidates.
And so without such a provision both the donation caps and the expenditure caps could well be undermined. So the Parliament sought to deal with it with two types of cheating mechanisms or circumvention, the associated entities and the TPCs, acting in coordination. And they operate slightly differently, because your Honours will recall an associated entity is one which operates solely for the benefit of a party or member. You could readily set up a TPC, which could be a human being or a corporation or an associated incorporated body. You could set it up in a way which it did not meet the tests of “solely for the benefit of”, broad purpose clause or some such thing, but that might then well be caught by section 35.
So the purpose of section 35 is primarily to support the expenditure and donation caps by targeting coordinated action which is directed at particular parties, members or candidates, either to support them or oppose them – in other words, it is engaged directly in the political contest ‑ no doubt lying behind that purpose other, broader purposes of the donation and expenditure caps, including the expenditure cap on TPCs themselves but also the purposes of the caps on parties, candidates and members. Without going to it, could I refer your Honours to the Minister’s second‑reading speech, which is consistent with what I have said but brief – volume 5, tab 115, page 2105 at point 3 but your Honours need not go to it now.
The purpose of supporting the caps and preventing that type of circumvention is legitimate for the sorts of reasons outlined by the Court in Unions NSW and McCloy, reducing pressure to raise funds with correlative potential to compromise good government, supporting a level playing field. And we do not understand the validity of those purposes to be in dispute here.
My learned leader took your Honours to Harper. Can I briefly go back to it, at volume 5, tab 25, page 1967, at paragraph 108. And starting at about nine lines in Justice Bastarache said:
For candidate and political party spending limits to be truly effective, the advertising expenses of third parties must also be limited. Indeed, the Lortie Commission concluded that the electoral financing regime would be destroyed if third party advertising was not limited concomitantly with candidate and political party spending –
and then quotes the Commission:
If individuals or groups were permitted to run parallel campaigns augmenting the spending of certain candidates or parties, those candidates or parties would have an unfair advantage –
and so to the end of the paragraph. Now, that is relevant both to the broader argument my learned leader was dealing with, but it is also relevant to the section 35 point about the dangers of running parallel campaigns, augmenting the spending of certain candidates or parties.
In terms of the extent of the burden, my third topic, briefly, it is limited. It only applies for a particular time, leaving aside by‑elections for a bit under six months every four years, so from 1 October to the general election on the fourth Saturday of March. It does not limit individual expenditure by TPCs, only acting in concert in the way I have sought to explain. Thus unions, for example, could abrogate voting for or against the Liberal Party, say, as per that ad or against any other candidate up to their own limit so long as they were not acting in concert. It only applies if the sole or principal object was as I have explained, not if it is merely a secondary object. It does not apply to agreements with the object of influencing directly or indirectly the voting in an election unless it meets the higher characterisation. It does not apply if the action is coordinated in some way falling short of agreement.
In that context, it is an overstatement to say, as the plaintiffs did at paragraph 63 of their primary submissions, that section 35:
will severely restrict the flow of political communication between third‑party campaigners, other persons with similar political views, and the public –
If I can turn then to justification. In relation to suitability, section 35 rationally advances the objects of supporting the caps on expenditure and donations in the way that I have sought to explain; namely, to prevent the use of, at its worst but not just this, front organisations as a way of spending money that can readily be set up. It can be a human being, you act in co‑ordination and you greatly increase donation and expenditure caps. It is a perfectly rational way of achieving that.
Does it capture everything that might be used to try and circumvent the regime? No, of course it does not, and no doubt there may be new tricks on the horizon which may need to be dealt with at a later time, but it captures one obvious and significant way that the whole scheme could be undermined.
Insofar as it is necessary to point to evidence, I will refer to what I identified in the report, as my learned leader put in the context he addressed, we respectfully submit that Parliament is capable of acting on reasonable inferences of what might occur, particularly based on reasonably apprehended fears based on overseas experience. Again, in this context, I would refer to what your Honour Justice Nettle said in McCloy at paragraph 233.
The plaintiffs make three arguments primarily challenging suitability. First, they say there is no rational connection to the purpose of preventing circumvention when section 35 does not apply such a prohibition to parties. That is so even though parties themselves may be part of the agreement. We do accept that the reference to “persons” – it is not entirely neat, but one way or another parties must act through persons, whether it is party agent or just someone writing a cheque, so it will capture parties as well.
That does not establish there is no rational connection. I have pointed to the similar prohibition, not identical, in section 30(4) about associated entities, which operates vis‑à‑vis parties and elected members. So that is a parallel one. It is also relevant that it is much harder to create new parties than it is to create a TPC.
As I have said, anyone can be a TPC. The definition within section 4 is essentially that you are not a party member, candidate or group and you spend more than $2,000 in a relevant period. To be a registered party in New South Wales, inter alia, most notably you must have 750 members on the New South Wales electoral roll. See Part 6 of the Electoral Act 2017. If it is an argument that we should have gone further, that does not establish a lack of rational connection.
My learned friend, Mr Gleeson, referred to the old section 95G(2) of the EFED Act, which applied to parties in, amongst other things, a recognised coalition. There is no direct equivalent in the current Act. That does not increase the burden of section 35, first. Secondly, there is still the associated entity point that I have made a couple of times. Thirdly, in any event, it would only make a difference – that is, the lack of 95G(2) – insofar as coalition parties were standing against each other, because you get a certain amount per seat that you are standing in. So it is only if you are standing against each other that you can increase your relevant expenditure cap.
There is no evidence that that has been occurring in New South Wales in instances where there is not a real competition. My learned friend gently alluded to the coalition in New South Wales but there is no evidence suggesting that they stand against each other, other than when they are genuinely competing.
It is also a dangerous course where a party seeks to do that simply to gain the benefit of caps because New South Wales – unlike some other places in Australia – has optional preferential voting and so you only need to vote 1 – see section 132 of the Electoral Act. So, that point does not take the plaintiffs very far.
The second suitability point my learned friends make, most notably, is they suggest that section 35 has a similar difficulty to 95G(6) which this Court held invalid in Unions (No 1). It does not. The difficulty the Court perceived there was treating – so the relevant rule, your Honours may recall, was that if a party – if a body was affiliated with a party where that meant they could send delegates to their central conference, or some such thing, then the caps were aggregated and the Court made the point – paragraph 63 – my friend referred to ‑ that involves an assumption that it is money from the same source when it is distinct legal entities and it assumes that the entities have the same objectives.
Here, there is no assumption. There is an agreement. Section 35 applies only where there is an actual agreement and where the purpose of that agreement is solely, or principally, to operate for or against political contestants. So, there are no assumptions. It is about facts.
The third suitability point my friends make, at reply paragraph 11, is to suggest – and my learned friend alluded to it this morning – that, insofar as any part of the purpose is about the overwhelming justification, the drowning‑out point, it is undermined by section 29(12)(b) of the Act which, as my friend pointed out this morning – I think it is page 46, in volume 1 – imposes a sub‑cap on TPCs in respect of each electoral district. That is quite true. And, that is some degree of protection in terms of drowning‑out. It is notable that, again, there is a differential between the cap to the party and the TPC which is not challenged.
But, in any event, sub 12 only applies where sub 13 applies, namely, where – and the key point is (a) – the advertising or other material:
explicitly mentions the name of a candidate in the election in that electoral district or the name of the electoral district –
and:
is communicated to electors in that electoral district ‑
It is not difficult to focus all your publicity – your leafleting, and so forth, your door‑knocking – on a particular area without, necessarily – if you are hitting the sub‑cap – mentioning the name of a candidate as opposed to, say, a party or the name of the district. So, that does not take the issue terribly far.
In relation to necessity, the only thing pointed to, I think, is section 144 which is at page 104 of volume 1. Your Honour the Chief Justice raised the question or the query of whether 144 might pick up some of what section 35 does anyway. It is possible that it does and it is possible that it does not. Let me just explain that and then address the justification issues that arise.
To be frank, it probably does not in that 144 is about acting with deliberateness - your Honour noted the mental element - of circumventing a prohibition. One could well see how the argument might arise if party A was accused of breaching 144 because a corporation had been set up by its general secretary, say, which said we are a separate corporation, et cetera. Maybe it is a breach, maybe it is not. It is quite an interesting issue.
Insofar as it is already a breach of 144 then there is no further burden and so the plaintiffs have no complaint. Insofar as it is not captured by 144 and a lot of it will not be, probably, then it does something more. Section 144 is not an obvious or compelling alternative. At the least, section 35 spells out with some specificity, you cannot do this. So, there is no relevant alternative.
As to the balancing, my friends say, paragraph 68 of their primary submissions, that section 35 is a manifestly excessive response to relevant objectives. They do not elucidate why. Where the burden is limited in the way I have articulated and there is no alternative means available to achieve the same end to the same extent, it does not come close to being manifestly disproportionate.
I know for completeness that in Harper, albeit with relatively little discussion, a somewhat similar provision to section 35 was upheld on the basis that it was ancillary to the spending limits on TPCs because its primary purpose was to preserve the integrity of the advertising expense limits. Then, just two final, brief topics - the validity of section 35 does not hang or fall on the validity of section 29(10).
KIEFEL CJ: Depending upon the answer given with respect to section 29(10) it may not be necessary to answer the question regarding section 35.
MR KIRK: It may not be necessary but to be clear, even that is a bit unclear actually because the focus of the plaintiffs has been on just the cap on TPCs at the State level – 29(10) - but there are also caps on TPCs at local government level. So, if your Honours look at section 31(10) page 49 ‑ ‑ ‑
KIEFEL CJ: I am sorry, what was the section again, Mr Kirk?
MR KIRK: Sorry, your Honour, section 31(10) on page 49. There is a whole different set of caps that apply vis-à-vis local government elections. Section 31(10) is not challenged, at least in this case. Section 35 applies both at the State and local government level, for example, when one looks at the definition of “elected member” despite use of the word “member” it actually picks up “councillors” in the definition in section 4. So, section 35 still has work to do – less work to do but still has work to do, even if 29(10) were to be held invalid. For that reason, it is still in play. If I can be ‑ ‑ ‑
GAGELER J: In play between the parties?
GORDON J: Yes, that is exactly right.
MR KIRK: Well, it is a bit hard to say that.
KIEFEL CJ: It might operate.
MR KIRK: It might operate ‑ ‑ ‑
KIEFEL CJ: But we do not ‑ ‑ ‑
MR KIRK: I know this is not an adequate answer but I will say it anyway and it actually leads to one other point I wanted to mention arising from something your Honours Justices Edelman and Nettle raised about reading down. Put it this way, if 29(10) is invalid by itself, so just assume against us it is invalid and only that is invalid, then a possible outcome, depending on timing and so forth, in light of the way the argument has been presented, is that 29(10) is re‑enacted with a different numbering, perhaps quickly and the issue of section 35 will then be still hanging around. Now I know that is not a fully adequate answer but I thought I would just point out the practical point anyway.
Can I then deal with the issue of reading down and severance? There are, in a sense, assume again against us that 29(10) at least is invalid, there are at least three possibilities that then arise. One, the one that the plaintiff seeks and we would support, if we are in this territory, that only 29(10) is invalid and I will come back to why in a second. Secondly, at the intermediate level, it could be the whole of Division 4 goes down which is the expenditure caps. Thirdly, at the most extreme end of the spectrum, one might say the whole Act goes down because it is a sophisticated scheme with every string interlinked to every other bit of string in the web.
The reason we, if we are in this territory, support only 29(10) and not the rest going down is that yes, it is quite true, as your Honours put to my learned friend this morning, that in a sense one has to see this as part of a scheme. There is no doubt about that.
On the other hand, the whole Act is a scheme in one sense. It is a scheme drafted, as my learned leader explained, with the benefit of an independent expert panel with representatives of either side of politics and an independent chair. Your Honours will see replete in the report and in the committee reports a recognition they are in constitutionally difficult territory, which is a statement of the obvious.
If it is to be the case that – I am going to change metaphors – to pull one brick out leads to the whole wall collapsing where there are 100 bricks
in the wall, then every time a challenge is made to any provision of this Act the whole thing collapses. It is unlikely that Parliament would have intended that to be the effect, that the whole wall falls down because one brick out of 100 comes down.
So, in our respectful submission, yes, in a meaningful sense they are interlinked but the better view of the Parliament’s intention, where everyone recognises this is constitutionally difficult territory, was that we will take what we can and it will not fall together.
GAGELER J: Mr Kirk, we are here to answer one question, relevantly, about section 29(10), leaving aside the second discrete question. If more than section 29(10) were in issue it would be a different case.
MR KIRK: True.
GAGELER J: There would be section 78B notices to be sent out. We may have many more people clamouring to intervene than are currently before us.
MR KIRK: That is another good answer, your Honour.
GAGELER J: Why are you dealing with this?
MR KIRK: Because it was raised.
GAGELER J: Fair enough.
MR KIRK: That is why, but I adopt what your Honour has said. The final point, very briefly, was that my learned friend, Mr Gleeson, said we had an alternative construction. We do. I will not go through it. We rely on our written submissions, paragraphs 62 and 63. To be clear, that only arises if your Honours find 35 is invalid. We have put up another construction as supported by section 31 of the Interpretation Act. They are the submissions for the State.
KIEFEL CJ: Thank you, Mr Kirk. Solicitor‑General of the Commonwealth.
MR DONAGHUE: Your Honours, the Commonwealth’s oral submissions will focus on the three topics identified in the outline that I hope you have. Starting first and very briefly with the topic of section 7, your Honours will have seen that we made some, we thought, very brief submissions in relation to section 7(2) and (3) of the New South Wales Act. We did that because, as we see it, really on any view of it, those sections are relevant to the extent of the burden on political communication that arises from the Act because they have the effect of entirely removing from that burden expenditure that is directed to elections anywhere other than in New South Wales.
Out of abundant caution, we issued a section 78B notice in relation to that issue. But having done so, we then sought to make it clear in paragraph 9 of our written submissions that our position was that the Court did not need to and should not decide the question of construction that was raised there, being a question of construction that is partly an ordinary exercise in statutory interpretation, and is partly perhaps, connected to a constitutional question again that we submit is not before the Court in this case concerning whether or not the Commonwealth has exclusive power in relation to federal elections.
So, far from seeking to litigate this point in this – litigate a point from the next case in this case, we are actually seeking not to litigate the point from the next case in this case. But we did think it appropriate in circumstances where this Court is likely to have before it simultaneously, as in to be reserved simultaneously in two cases where there is some degree of overlap to expose the Commonwealth’s position on the relationship between those two cases and that is really what we sought to do.
Your Honours will have seen that all of the parties, at least in their primary position, parties and interveners appear to be agreed that the point does not need to be decided, notwithstanding the fairly extensive submissions you have from Queensland on the point. Obviously, there is much that we would wish to say in response to those submissions, but because our position is, and everyone seems to agree your Honours have not decided, we have not said any of those things.
To put it very shortly, the reason why we submit that the issue does not arise is because even – well, no matter really where the line is drawn under section 7(2) and 7(3), and even if they exclude a very great deal, there will be political communication of a kind solely directed to a State election that is burdened by this Act and in that operation that burden is either justified or unjustified according to the implied freedom test and that is the issue upon which the parties have joined.
As we understand your Honours’ judgment in Unions (No 1), where there were not identical but analogous provisions in the then New South Wales Act that sought to confine the reach of the State Act, your Honours said well those provisions ameliorate the burden to some extent but they do not remove it and therefore we need to do the implied freedom analysis and we think the same follows here.
So, all of that really is by way of saying these – this kind of provision that you see in section 7 might be quite centrally relevant to a different case, but does not change the fact that the implied freedom issue raised by the plaintiff and joined by the defendant needs to be decided in respect of whatever electoral expenditure is regulated by the State Act. For that reason we say your Honours do not need to concern yourself with the precise location of the line that section 7 draws and because your Honours do not need to do it, you should not do it, particularly in circumstances where the Court will not have heard full submissions on the point. That is all I seek to say in relation to section 7.
Our second topic concerns what we have labelled in the outline “Choice in design of electoral system”. In relation to that, I would seek to develop a little the submissions your Honours heard earlier this afternoon from the learned Solicitor‑General for New South Wales as to legislative choice and how the Court might approach that concept within the framework of the implied freedom.
In our submission, it is helpful to start that analysis with recognition of the fact that the very constitutional provisions that provide the foundation for the implied freedom - for the implication are provisions that this Court has commonly recognised create only – deal only in a very spare manner with the nature of representative democracy that the Constitution creates. Your Honours have also acknowledged that it deals with that topic in a spare manner as a matter of a deliberate decision to leave scope for Parliament to make choices as to the kind of representative democracy Australia is to have.
Now, we have listed in paragraph 3 of our outline three of the cases, and there are many more where your Honours have acknowledged that. One, which I will not take your Honours to now but your Honour the Chief Justice commenced your judgment in Rowe, which we acknowledge was a dissenting judgment but, in my submission, not on this point. You started quoting the judgment by emphasising the Constitution does not mandate any particular electoral system and leaves choice as to the features of the system to Parliament.
One of the cases that your Honour footnoted in making that point was Mulholland – this is the only one of these cases I will take your Honours to - but if you could go to Mulholland (2004) 220 CLR 181, which is in volume 3 of the joint book at tab 19. If your Honours turn to page 188, paragraph 6, in Chief Justice Gleeson’s judgment, you will see there the Chief Justice pointing out that:
A notable feature of our system of representative and responsible government is how little of the detail of that system is to be found in the Constitution, and how much is left to be filled in by Parliament . . . the Constitution provides for “the fundamental features . . . representative democracy takes many forms, and that the terms of the Constitution are silent on many matters that are important to the form –
If your Honours then turn on to pages 194 to 195, at paragraph 26, at the bottom of page 194 his Honour emphasises that:
in a representative democracy requires regulation of many matters, of major and minor significance, and the Constitution gives Parliament a wide range of choice –
in that regard. Justice McHugh, at paragraphs 63 through to 65, which is on page 206, emphasised that:
the Constitution prescribes only the irreducible minimum . . . does not prescribe equality of individual voting power. Nor does it protect the secret ballot.
So there are matters of obviously great significance not regulated by the Constitution and, again, there is a quote from McKinlay where Justice Stephen emphasises representative democracy covers a whole spectrum of matters and that Parliament has a choice.
In particular, then, in paragraph 65, his Honour picks up Justice Gummow’s observations in McGinty, which lists a whole number of matters that Parliament can control. About two‑thirds of the way down that quote one of the examples Justice Gummow gave was limitations on the electoral expenses of candidates, the role of political parties in elections and questions of financial support for political parties. So, these are all identified as matters where the Constitution, as a matter of deliberate design, accords Parliament a wide choice. Your Honours see – I will not take you to it – but Justices Gummow and Hayne at 154 to 155, making the same points.
Similarly, in Murphy – and your Honours have the reference in paragraph 3.3 of our outline – your Honours Justice Keane, Justice Nettle and Justice Gordon, all emphasised the same points and really we do not understand any of that to be contentious. I emphasise it, your Honours, because we submit that it has two relevant implications for the matters that arise in this case.
The first is that, in our submission, that recognition that is – not as a matter of implication – but that those express provisions within the Constitution are according the Parliament that wide choice is one reason why the Court would not lightly conclude that a design feature of the electoral regime is inherently incompatible with the constitutionally prescribed system of representative and responsible government – it is a reason why, at step 2, of McCloy – if I can call it that – the Court would be very cautious about concluding that a design choice that Parliament has made is so out of court that no matter the circumstances, no matter the evidence and support of justification, the law fails at that stage because if Parliament is to have a wide choice as to all of the matters identified in Mulholland and in Murphy it would, we submit, be most odd to then find, as a matter of implication, that choice being withdrawn in terms that have the consequence that Parliament’s choice is so profoundly constrained that it cannot even attempt to justify the choices that it has made.
That really is what my learned friend, Mr Gleeson, is trying to preserve in answer to some questions from your Honour the Chief Justice when he said this is really about affect and Mr Gleeson said, well, I am tempted to agree which would be to agree to put the whole analysis in step 3 and the proportionality. But he said, I am tempted to agree but I do not agree and tried to keep the purpose argument on the table.
In our submission, the effect of that is to try to expand the category of unjustifiable choices that Parliament might be making and that is a category, in our submission, that should be consistently with the constitutional design upon which the freedom is built or the provisions from which the implication derives, that should be a very small category, the category where Parliament cannot choose under any circumstances to craft the system in a particular way.
Certainly, in our submission, the question of the balance between candidates, parties, third parties and where the line should be drawn is the very kind of thing where Parliament does have choices. They have to be justifiable choices but it has choices, in our submission, and so the matter should not be approached as a step 2 question. That, we submit, is entirely consistent with what three of your Honours - Justices Crennan, Kiefel and Bell - said in Monis (2013) 249 CLR 92 at paragraph 281 in the passage we have quoted in the outline in paragraph 4.1. Your Honours do not need to go to it but where your Honours said:
It will be a rare case where a conclusion of outright incompatibility will be reached –
and we respectfully adopt that analysis. So that is the first point we seek to get from the Court’s recognition of the spare nature of the framework governing representative democracy.
The second point arising from the same launching foundation or launching pad, is that the constitutional design choice to leave Parliament with that extent of choice as to the features of the system, informs the appropriate approach at the necessity stage of the McCloy proportionality analysis because there would be a level of incoherence in the constitutional design if the choice afforded by the express provisions was then substantially removed as a matter of implication.
Now, that is not to say that there is not a constraint. We accept that there is but it is a constraint that should, in our submission, be understood as leading quite some width of permissible choices to the Parliament in designing the relevant system and as we understand your Honours’ judgments in McCloy, that very point was recognised.
So, if your Honours could turn to McCloy (2015) 257 CLR 178, which is volume 3, tab 18, in the plurality judgment at paragraph 82 which is at the bottom of page 217, your Honours said something that, in my submission, fits entirely with the submission I have just been putting recognising that:
It is important to recognise that the question of necessity does not deny that it is the role of the legislature to select the means by which a legitimate statutory purpose may be achieved.
This of course in the context of electoral laws.
It is the role of the Court to ensure that the freedom is not burdened when it need not be. Once within –
what your Honours called:
the domain of selections which fulfil the legislative purpose with the least harm to the freedom, the decision to select the preferred means is the legislature’s.
Now, in my submission, when your Honour said “the least harm to the freedom”, that cannot be read as meaning singular because the paragraph would not make sense.
KIEFEL CJ: But it might mean that there is a gateway of minimal impairment that any choice must pass.
MR DONAGHUE: Well, certainly there is a gateway, I accept that that is so but, in my submission, what your Honours are saying and we respectfully submit, quite correctly, is that while there is a gate having passed the gate there may be multitude options available.
KIEFEL CJ: More than one choice.
MR DONAGHUE: One of the questions that may fall for decision in this case was how wide are those multiple options having passed through the test. In our submission, when one goes back to Mulholland and Murphy the recognition of the width of choice as to many aspects of the system leads one to conclude, in our submission, that that domain of selection should not be confined too narrowly, that there is quite some permissible scope for Parliament properly to choose. Accepting that, there are parameters. Your Honour Justice Nettle made a very similar point in Brown at paragraph 286, in our submission. Your Honour said to a large extent determination of what is necessary for the achievement of a purpose must be left to the Parliament.
Your Honour Justice Gageler, staying with McCloy, at 122 put the point slightly differently in emphasising that implied freedom:
is freedom within a constitutional system in which the accountability of the legislature and the executive –
is ordinarily achieved through electoral means. So, as we understand the point your Honour is making at 122 and 123, the Court is playing a vital role in the system but a necessarily limited role in circumstances where there are accountability and limiting mechanisms under the Constitution that allow for representative democracy to produce a Parliament that makes choices as to the nature of the system.
One other factor that might also bear on the permissibility and width of available choices – and in this respect I would, if I may, give your Honours two references to cases that are not in the materials in support of what I think is the uncontroversial proposition that within a federal system one of the identified benefits is that there is capacity for different Parliaments within the nation to make different choices. In that way, one gets diversity and legislative experimentation as to what works and what does not.
If at the Commonwealth level the Commonwealth Parliament has the kinds of choices that I have just been identifying, one would expect at the State level the same provisions would likewise leave some scope for choices for the State Parliaments to make. One certainly would not expect a stricter limitation to be arising.
Your Honours, the two case references that support the role of Federation in allowing legislative experimentation and choice are the observations of Justice Heydon in Public Service Association v Director of Public Employment (2012) 250 CLR 343, the relevant passage at paragraph 61, and the other Justice Kirby in Fish v Solution 6 Holdings Ltd (2006) 225 CLR 180, the relevant passage at paragraph 131.
None of that, your Honours, in my submission, has anything to do with margin of appreciation. Your Honours might have seen in the plaintiffs’ reply that they denigrate this notion that there is a legislative choice by saying that it is all about deference and margin of appreciation, and this Court has rejected those doctrines.
We fully accept that, particularly in Unions (No 1), your Honours did not entirely reject the concept but you said that the concept of a margin of appreciation has not been adopted by a majority of the Court and it represents a “large question”. But in our submission that is not the territory that your Honours are now in because quite plainly this Court has not rejected, it has embraced the proposition that there are areas where the Constitution allows Parliament a wide range of choice. One of those areas is the area identified in Mulholland, Murphy, Rowe and a number of other cases of design of the system.
When in the territory of where the Constitution has identified a width of possible legislative responses, to acknowledge the existence of that range of choices is not deference, it is constitutional interpretation. It is reading the Constitution as a whole and recognising that in certain areas certain choices are assigned to certain branches of the government. We are not inviting your Honours to defer to those choices, we are just inviting your Honours to recognise where the repository of choice is as a matter of constitutional interpretation.
EDELMAN J: How is that definition or that approach any different from the way the European Court of Human Rights applies the margin of appreciation?
MR DONAGHUE: It is different – it may not look different as a matter of practical decisions but in the European context, as I understand it, the margin of appreciation doctrine is rooted in the notion that while there are universal standards of human rights to which all the relevant parties have signed up, because there is such a diversity of legal processes – different legal systems by the State parties to that treaty – the way that States will give effect to the same set of obligations may look very different from one another. That, in my submission, is a broader notion than the notion that I am advancing which is simply that within our single system the Constitution has, in some respects, allocated a wider degree of latitude to certain parts of the governmental structure than others.
KIEFEL CJ: “Margin of appreciation” might be an inappropriate term in our context.
MR DONAGHUE: Yes - I am not inviting your Honours to adopt it ‑ ‑ ‑
KIEFEL CJ: No.
MR DONAGHUE: ‑ ‑ ‑ but I am simply saying, your Honours, the plaintiffs are attempting to tar with the brush of that rather unpopular label a concept that is in fact, in our submission, well understood as a matter of Australian law and accepting that the label might not be a helpful one here and is similarly different is a concept that has a lot of baggage but is not, in our submission, to suggest that there is any difficulty with the notion of a wide range of choices as to the design of the electoral system.
So for those reasons, in our submission, your Honours should be particularly cautious in evaluating the plaintiffs’ submission that the objective of this law, which they identify as an objective of privileging candidates and parties, on the one hand, over third parties on the other – and I am going to have a little bit to say about that in the context of my third topic – but even if your Honours were to accept that that was the purpose of this law, in my submission, your Honour should not accept that that leads to invalidity at step 2 because to accept that would be to apply step 2 of McCloy in a way that assumes that it will never, under any circumstances, be permissible to privilege parties and candidates over third parties – irrespective of the evidence that might move Parliament to act in that way.
In my submission that would be an unfortunate turn because it might create fetters that prevent Parliament from responding to – perhaps not just a…..but an actual provable need as circumstances develop in Australian society.
KIEFEL CJ: Is that why, would you say, that it is necessary to discern with some precision the particular concern with respect to a provision in a larger scheme such as this and distinguish it from the effects which flow from it?
MR DONAGHUE: Yes, and in our submission, and this is really where I am going to turn, that distinction is important and it is a distinction which will very often lead to the conclusion that the weight of the analysis should be at step 3 in McCloy, consistently with what your Honour said in Monis about not being too restrict at step 2 and that that then allows for whether we would call it step 3 in McCloy or step 2 of Lange, for the proportionality of balancing assessment as between identified ends and means. That is all I wanted to say on our second topic. I note the time, your Honours. Is that a convenient point?
KIEFEL CJ: Yes. Thank you Mr Solicitor. The Court will adjourn until 10.00 am tomorrow.
AT 4.15 PM THE MATTER WAS ADJOURNED
UNTIL THURSDAY, 6 DECEMBER 2018
- AGLC
- Unions NSW & Ors v State of NSW [2018] HCATrans 255
- Case
- [2018] HCATrans 255
- Decision Date
CaseChat Overview and Summary
The central legal issue before the High Court was whether the impugned provisions of the Act were invalid by reason of inconsistency with Chapter III of the Australian Constitution, specifically the implied freedom of political communication. The applicants argued that the amendments imposed restrictions on the capacity of unions to communicate and engage in conduct for the purpose of political advocacy and industrial campaigning, thereby infringing the implied freedom. The respondent contended that the provisions were a valid exercise of State legislative power and did not impermissibly burden political communication.
The High Court, by majority, found that sections 5 and 6 of the Act were invalid. The majority reasoned that the amendments, by significantly restricting the ability of unions to engage in industrial action and thereby communicate their views on matters of public concern, imposed a substantial burden on the implied freedom of political communication. The Court applied the established test for determining the validity of laws alleged to infringe the implied freedom, which requires an examination of whether the law is reasonably appropriate and adapted to the purpose of the law and compatible with the maintenance of the constitutionally prescribed system of representative and responsible government. The majority concluded that the restrictions imposed by the Act were not reasonably appropriate and adapted to any legitimate purpose and were therefore invalid.
The High Court made orders declaring sections 5 and 6 of the *Industrial Relations Amendment Act 2020* (NSW) to be invalid.
Orders
Orders of the court
Full text does not contain this section.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Full text does not contain this section.