The Victorian Government has announced major changes to the state’s political donation laws following a High Court decision that effectively dismantled Victoria’s existing donations regime ahead of the November state election.
Premier Jacinta Allan revealed that political donation caps will be increased to $7,500 per donor over a four-year parliamentary term. First-time candidates and new entrants to politics will be permitted to receive up to $15,000 from individual donors during the same period—double the amount allowed for established candidates.
According to Allan, the higher cap is intended to help new candidates establish themselves in the political system while restoring a workable donations framework after the High Court struck down key parts of the previous laws in April.
The proposed legislation will also introduce a complete ban on foreign political donations, require disclosure of donations received during the recent legal gap in regulations, and compel Labor, Liberal, and National parties to return any unspent funds received from nominated entities after the High Court’s ruling on April 15.
The reforms follow a successful legal challenge by independent candidates Paul Hopper and Melissa Lowe, who argued that the previous system unfairly favoured major parties by allowing them access to funds through “nominated entities” while independent candidates remained subject to strict donation limits.
The High Court’s decision left Victoria without effective donation caps or restrictions on foreign donations, creating uncertainty ahead of the upcoming state election.
Under the government’s proposed changes, any funds transferred from nominated entities to major political parties after April 15 that remain unspent will need to be returned. The nominated entity system was a central issue in the court challenge, with critics claiming it provided established parties with financial advantages unavailable to independents and minor parties.
The Coalition has strongly criticised the reforms, arguing they remain unfair and could face further constitutional challenges. Shadow Attorney-General James Newbury accused the government of attempting to manipulate the electoral system and warned that the proposed laws may again be vulnerable in court.
Opposition figures have also questioned plans for increased public funding of political parties, arguing taxpayers should not bear additional costs during a period of rising living expenses.
Despite the criticism, the government maintains the reforms are essential to restore transparency and integrity to Victoria’s electoral system before voters head to the polls.
Special Minister of State Ingrid Stitt said the changes would help ensure elections remain fair, transparent, and free from undue influence, stressing that election outcomes should be determined by voters rather than financial power.
While foreign donations will be completely prohibited under the new framework, the possibility of further legal action remains. Hopper and Lowe have indicated they may return to the High Court if they believe the revised laws continue to favour major parties or incumbents.
The Greens are expected to support the legislation to ensure a donations framework is in place before the election, although party leader criticised Labor for creating what she described as a “complete mess” and called for a broader review after the election.
With support from crossbench MPs in the upper house, the bill is expected to pass Parliament this week.
The reforms arrive at a challenging time for the Allan Government, which is facing pressure over cost-of-living concerns, public debt, service delivery, and integrity issues.
For independent and minor-party candidates, the increased donation cap could provide greater opportunities to raise campaign funds. For major parties, however, the restrictions on nominated entity funding represent a significant shift in the way election campaigns are financed.
Nevertheless, with the prospect of another High Court challenge looming, Victoria’s political donation system may remain uncertain right up to election day in November.