EDELMAN J.
Introduction
When the Engineers' Case is "stripped of embellishment and reduced to the form of a legal proposition", it stands for the proposition that "a power to legislate with respect to a given subject enables the Parliament to make laws which, upon that subject, affect the operations of the States and their agencies". The decision has been criticised, sometimes trenchantly. It has stood for nearly a century but other doctrines have been built around it, mitigating its effect. Those include constitutional implications, relied upon in this case, some of which restrict its otherwise unimpeded operation upon the States. The restrictions were relied upon in this case but they do not invalidate any of the laws in issue. The point that ultimately divides the Court in this case concerns the limit of the Commonwealth's power to make its legislative regimes exclusive of the States.
If a donation is made to a political party operating at both State and federal levels, and if the donation could be used for either State or federal electoral purposes, polities at both levels of government can subject the donor or the recipient to regulation. Such untied donations, which directly attract the interests of both polities, were described by the plaintiff in this case as the "unallocated middle". At the heart of this case is the Commonwealth's legislation to make its regime exclusive in respect of that unallocated middle, whilst carving out from that exclusivity a sphere for operation of State laws affecting the interests of that State. The Commonwealth regime thus leaves unaffected in relevant respects the legislative regimes in New South Wales, Victoria, and South Australia, which are closely tailored to the interests of those States. But it is inconsistent with the much broader regime in Queensland.
Section 275 of the Electoral Act 1992 (Qld) ("the Queensland Electoral Act") and the equivalent provision, s 113B of the Local Government Electoral Act 2011 (Qld) ("the Queensland Local Government Electoral Act"), make it unlawful for donations to political parties to be solicited by, made by, or received from, a property developer, or on behalf of a property developer. Immediately before Federation, a colonial parliament had power to pass laws of this nature. Section 107 of the Constitution continued this power for the parliaments of the States, unless it was exclusively vested in the Commonwealth Parliament or withdrawn from the States.
In this special case, the plaintiff, and the Attorney-General of the Commonwealth intervening, submitted that this power was, by implication from the Constitution, exclusively vested in the Commonwealth Parliament. The plaintiff also submitted that it was withdrawn from the States either by the application of an implication necessary to preserve the functioning of the Commonwealth as a polity ("the reverse Melbourne Corporation implication") or by the implied freedom of political communication. None of these attacks on the existence or extent of State legislative power should be accepted.
Part XX of the Commonwealth Electoral Act 1918 (Cth) ("the Commonwealth Electoral Act") also creates a regime to regulate, amongst other aspects of federal elections, political donations. In some respects, such as in relation to foreign donors, the Commonwealth regime is more restrictive than the Queensland regime. In other respects, it is more permissive. For example, the Commonwealth regime does not prohibit property developers from making donations to registered political parties but subjects property developers to a generally applicable regime of disclosure. Many political parties registered under the Commonwealth Electoral Act operate at both State and federal levels. Section 302CA of the Commonwealth Electoral Act, concerning exclusivity of the regulation of prohibited donors, and s 314B, concerning exclusivity of the regulation of disclosure, make exclusive the Commonwealth regime regulating donations to registered political parties.
If s 275 of the Queensland Electoral Act and s 302CA of the Commonwealth Electoral Act are both valid laws then s 275 is inconsistent with s 302CA and therefore rendered inoperative by s 109 of the Constitution. The same conclusion follows for s 113B of the Queensland Local Government Electoral Act. However, the State of Queensland and the intervening State Attorneys-General submitted that, for various reasons, s 302CA of the Commonwealth Electoral Act is beyond the prima facie power of the Commonwealth Parliament or that it falls within an area of intergovernmental immunity and corresponding lack of Commonwealth power. None of the attacks on Commonwealth legislative power should be accepted.
The particular issue that divides this Court is whether s 302CA of the Commonwealth Electoral Act is within power. Ultimately, the issue reduces to whether the Commonwealth has the power to make its own regime exclusive, albeit subject to various carve‑outs for State legislation. The nature of the State law should make no difference. It would be no different if the Queensland law had sought to permit property developers to make entirely unregulated donations to political parties that may be used for State or federal electoral purposes. Such a law would also be inconsistent with a Commonwealth law that had sought to make exclusive a general regime which included regulation of donations by property developers including by disclosure requirements. In my view, the weight of precedent is too heavy, and the stream of legal development has been too clear, to conclude now that Commonwealth exclusivity provisions, tailored closely to Commonwealth interests, are invalid.
Section 302CA of the Commonwealth Electoral Act is a valid law. Section 275 of the Queensland Electoral Act and s 113B of the Queensland Local Government Electoral Act are inconsistent with s 302CA of the Commonwealth Electoral Act and are therefore inoperative to the extent of that inconsistency.
The validity of the amendments to the Queensland Electoral Act
(i) The operation of the Queensland Electoral Act
On 2 October 2018, Pts 3 and 5 of the Local Government Electoral (Implementing Stage 1 of Belcarra) and Other Legislation Amendment Act 2018 (Qld) ("the Queensland Amending Act") came into force. The Queensland Amending Act introduced relevantly equivalent provisions into the Queensland Electoral Act, in relation to elections to the Legislative Assembly of Queensland, and the Queensland Local Government Electoral Act, in relation to elections of Queensland local government councillors. The submissions in this case focused upon the amendments to the Queensland Electoral Act on the assumption, which was not in dispute, that, apart from the plaintiff's submission based on the implied freedom of political communication, the legal position was relevantly identical in relation to the Queensland Local Government Electoral Act.
The amendments to the Queensland Electoral Act relevantly introduced a new Subdiv 4 to Div 8 of Pt 11. At the heart of the Subdivision, entitled "Political donations from property developers", is s 275, which provides:
"Political donations by prohibited donors
(1) It is unlawful for a prohibited donor to make a political donation.
(2) It is unlawful for a person to make a political donation on behalf of a prohibited donor.
(3) It is unlawful for a person to accept a political donation that was made (wholly or in part) by or on behalf of a prohibited donor.
(4) It is unlawful for a prohibited donor to solicit a person to make a political donation.
(5) It is unlawful for a person to solicit, on behalf of a prohibited donor, another person to make a political donation."
The essence of the section is to prevent property developers from, directly or indirectly, making gifts for the benefit of a political party, an elected member or a candidate in an election. By the definition in s 2, an organisation will be a political party within the scope of the prohibition provided that one of its objects is "the promotion of the election to the Legislative Assembly of a candidate or candidates endorsed by it or by a body or organisation of which it forms a part".
As agreed in the special case, the Liberal National Party, the Labor Party Queensland, Katter's Australian Party, Pauline Hanson's One Nation, and the Queensland Greens hold 92 of the 93 seats in the Legislative Assembly of Queensland. Each party, either directly or through an affiliated or related party, is also represented in the House of Representatives or the Senate, or both. In prohibiting political donations from property developers to political parties with an object of promoting candidates to the Legislative Assembly of Queensland, the Queensland Electoral Act therefore has the incidental effect of removing a source of funding for those parties' activities in the federal sphere.
(ii) Was power in relation to federal elections exclusively vested in the Commonwealth Parliament?
With some restrictions, colonial legislative power was generally as plenary and extensive within each colony as the power of the Imperial Parliament. The colonies plainly had an interest in the exercise of that plenary power in many matters concerning any election held in the colony. The many matters that a colony might have wished to regulate with respect to elections held within the territory of the colony may have included the facilities for polling places, ensuring peaceful and honest conduct during polling, or electoral advertising in the colony. Prior to Federation, some colonial parliaments had passed laws in relation to elections in the colonies which included: (i) restrictions on electoral expenses, including restrictions on payment of electoral expenses by third parties; (ii) bribery, undue influence, or solicitation offences; and (iii) requirements to include in electoral advertising the name and address of the person authorising the advertising.
Prior to Federation there was evidently no need for the colonies to extend their operative laws to federal elections which did not then exist. The Constitution conferred power upon the Commonwealth Parliament to make such laws, by ss 10, 31, and 51(xxxvi), and the incidental power in s 51(xxxix). But until these Commonwealth legislative powers were exercised there would be no laws relating to the time, place or manner of a federal election unless anticipatory laws were passed by colonial or State parliaments. The Constitution therefore ensured that there would be no lacuna by providing in ss 10 and 31 that until the Commonwealth Parliament otherwise provided, the laws that would apply to federal elections would be those in force in each State relating to elections for the more numerous House of the Parliament of the State. This was neither a conferral of legislative power upon the State parliaments in relation to federal elections nor was it based upon an assumption of an absence of State legislative power in relation to federal elections. Rather, it was to ensure that, from the moment of Federation, there would be an extant regime for federal elections. Central to the Commonwealth's submission that the Commonwealth Parliament has exclusive legislative power concerning federal elections is the decision of this Court in Smith v Oldham. That appeal concerned the conviction of the editors of The Argus newspaper of an offence contrary to s 181AA of the Commonwealth Electoral Act 1902 (Cth), which required that any newspaper article commenting upon a candidate, political party, or issue being submitted to the electors must be signed by the author, giving a true name and address. The offence concerned the publication of an unsigned article commenting on various candidates for election. The editors submitted that s 181AA was beyond the legislative power of the Commonwealth Parliament. The Court did not call upon the respondent to make submissions. Judgment was immediately delivered dismissing the appeal. Griffith CJ, Barton J, and Isaacs J all delivered reasons for decision finding that the law was within the core of the power (Barton J), or incidental to the core of the power (Griffith CJ and Isaacs J), of the Commonwealth Parliament in relation to federal elections. And each member of the Court said that the Commonwealth power was exclusive.
In this Court, Queensland and a number of interveners submitted that the decision in Smith v Oldham was based upon the doctrine that the Constitution, particularly s 107, reserved powers to the States. That doctrine has been rejected for nearly a century. The submissions of the appellants in Smith v Oldham had certainly been put on this basis. Mitchell KC and Irvine KC submitted that the power of the Commonwealth Parliament to legislate in relation to elections must be confined to "the conduct and control of elections" so that a law such as s 181AA, which they contended was concerned with the "conduct and control of newspapers", was a law concerned with a matter within the reserved powers of the States. But the Court did not rely upon that doctrine for the conclusion that there was an absence of State power. Although Griffith CJ and Barton J had been supporters of the reserved powers doctrine for several years, their Honours' reasoning about the absence of State power was not substantially different from that of Isaacs J, who was not a supporter of the doctrine. Indeed, the subtle antagonism towards the reserved powers doctrine that appears in the decision of Isaacs J in Smith v Oldham was later echoed in the joint judgments which his Honour delivered in R v Brisbane Licensing Court; Ex parte Daniell and the Engineers' Case.
In Smith v Oldham, the essence of the reasoning of each member of the Court concerning the absence of State legislative power was, unsurprisingly, not based upon the reserved powers doctrine. The reasoning was simply that the State had no interest in the subject matter of federal elections. Griffith CJ said that the matter was "one in which the States as such have no concern". Barton J said that "[n]o State has anything whatever to do with" the actions of citizens that affect the result and issues of federal elections. And Isaacs J said that the subject matter of federal elections was "transparently beyond the competency of the State to control". Neither Griffith CJ nor Isaacs J provided any further reasoning to support this assumption of an absence of State legislative power. The assumption by Griffith CJ and Isaacs J may have been based on the notion, later expressed by Latham CJ in West v Commissioner of Taxation (NSW), that matters specifically relating to the government of the Commonwealth are not laws for the peace, welfare and good government of a State. That reasoning was made explicit by Barton J, who said that no State constitution gave to a State parliament a power to legislate with respect to federal elections.
With respect, this reasoning confuses two separate matters. On the one hand, there was the colonial plenary legislative power, which supported laws relating to elections held in the colony. On the other hand, there are new facts and circumstances, arising after Federation, upon which that power might operate. The colonial plenary power to make laws concerning requirements for elections included a power to make laws for federal elections to be held in the territory of the colony even though an election of that nature extended beyond the territory and had not previously been held. The existence of new facts or circumstances upon which a power might operate does not change the nature of the power. This is particularly so where, as could have been reasonably foreseen at Federation, "[s]ocial, economic and political matters ... are increasingly integrated" and political parties operate "across the federal divide and at federal, State, Territory and local government levels". Political parties had begun to emerge by the 1890s, and Deakin had observed that it was "inevitable" that political parties in the Senate would "coalesce and throw in their lot with each other ... irrespective of state boundaries altogether".
The circumstances of this case are a good example of the underlying fallacy in the factual assumption that no State has an interest in the actions of citizens that affect the issues in federal elections. As the Attorney‑General for the State of Western Australia submitted, the interests of the States may even be engaged where a donation is given to a registered political party only for federal electoral purposes. The use for federal electoral purposes might: (i) be on an issue of both federal and State concern; (ii) allow funds that would otherwise have been used for federal electoral purposes to be used for State electoral purposes; or (iii) promote the brand of the political party if it operates at both State and federal level.
The more fundamental point about Smith v Oldham is that it has no precedential weight. "[Precedents], sub silentio without argument, are of no moment". The statement by each of Griffith CJ, Barton J, and Isaacs J that the States have no power to legislate in relation to matters incidental to federal elections was neither argued nor was it necessary for the decision. Further, a mere eight years after Smith v Oldham, the reasoning of this Court in R v Brisbane Licensing Court; Ex parte Daniell cast serious doubt upon the exclusivity reasoning by the Court in Smith v Oldham.
The provision in question in R v Brisbane Licensing Court; Ex parte Daniell was s 14 of the Commonwealth Electoral (War-time) Act 1917 (Cth) ("the War-time Act"). That section provided that on the polling day for an election of the Senate or a general election of the House of Representatives, "no referendum or vote of the electors of any State or part of a State shall be taken under the law of a State". The issue was the validity of a local option poll held in Queensland, purportedly under s 172 of the Liquor Act 1912 (Qld), on the day of an election of the Senate.
The prosecutor in R v Brisbane Licensing Court; Ex parte Daniell relied upon Smith v Oldham, asserting that the Commonwealth legislative power in relation to federal elections was exclusive. Alternatively, he submitted, if the power was not exclusive, then s 14 of the War-time Act was enacted pursuant to a concurrent legislative power, based upon s 9 of the Constitution, and prevailed over s 172 of the Liquor Act due to s 109 of the Constitution. The respondents responded by alleging that s 14 of the War-time Act was invalid either because there was no Commonwealth legislative power to pass s 14 or because it was an attempt to cut down the exclusive State legislative power conferred by s 9 of the Constitution. The joint judgment of six members of this Court disposed of the respondents' submission rapidly, concluding that the Commonwealth had power to pass s 14 of the War-time Act under all of s 10, s 51(xxxvi), and the incidental power in s 51(xxxix) of the Constitution. But that did not answer the questions raised by the prosecutor's submissions of whether s 172 of the Liquor Act was invalid either (i) because it trespassed upon an exclusive Commonwealth legislative power or (ii) because it was inconsistent with s 14 of the War‑time Act. The first submission was logically anterior to the second because s 109 operates only upon valid, albeit inconsistent, State and Commonwealth laws. The joint judgment implicitly rejected the prosecutor's first submission but accepted the second. Their Honours treated s 172 of the Liquor Act as valid but inoperative to the extent of the inconsistency with s 14 of the War-time Act.
The distinction between the two ways in which the prosecutor had put its case was a distinction with real consequences. If the Commonwealth legislative power over federal elections was exclusive then s 172 of the Liquor act would be invalid, irrespective of the existence of, or any inconsistency with, s 14 of the War-time Act. In contrast, the prosecutor's alternative submission would mean, as Higgins J observed, that s 172 "still lives, subject to the pressure of the Federal Act - like Jack-in-the-box under his lid" and the inoperability would be only to the extent of the inconsistency. Indeed, Higgins J expressed doubt about the extent of the inconsistency expressed in the joint judgment. Without the bedrock of Smith v Oldham, either as a precedent or as providing a coherent rationale, there remains to be considered the submission by the Commonwealth of an alternative rationale for the existence of exclusive Commonwealth legislative power over federal elections. The Commonwealth's submission was essentially that the scheme of the Constitution gives rise to a structural implication that legislative power over federal elections is exclusively a power of the Commonwealth Parliament. More precisely, the structural submission was said to be that the legislative power over federal elections is exclusively that of the Commonwealth Parliament, other than where the Constitution expressly provides for State power, such as by ss 7, 9, and 29.
That submission cannot be accepted. A structural implication of exclusive Commonwealth power over federal elections generally is not "logically or practically necessary for the preservation of the integrity of [the constitutional] structure". An immediate problem for the submission is that such a structural implication for exclusivity of a power over federal elections is contradicted by the structural placement of a necessary component of the Commonwealth Parliament's power over federal elections, s 51(xxxvi). That source of power is located in a section concerned primarily with concurrent powers, and followed by a different section, s 52, setting out those matters upon which the power of the Commonwealth Parliament is exclusive.
The alleged structural implication of exclusive Commonwealth legislative power is also said to operate in a manner that is fundamentally different from the exclusive powers expressly conferred on the Commonwealth Parliament by s 52 of the Constitution. That express conferral of exclusive power has the effect of invalidating any State law that is "with respect to" the subject of exclusive Commonwealth power. In other words, a State law is invalid if it has a connection with the subject matter that is not "'so insubstantial, tenuous, or distant' that it cannot be regarded as a law with respect to the head of power". That is because an exclusive power of the Commonwealth Parliament necessarily excludes any State legislative power on that subject matter. Hence, if Commonwealth legislative power in relation to federal elections were exclusive and the same approach to exclusive powers under s 52 of the Constitution were applied, then State laws concerning assault, defamation, bribery, fraud, or trespass would be invalid to the extent that they had any real connection with federal elections.
Perhaps in an attempt to avoid the absurdity of this result, the Commonwealth submitted that the power over federal elections is exclusive only once the State law is characterised as one concerning elections. It was submitted that the structural implication operates as a constraint upon State power in the same way as the express constraint "other than State banking" in s 51(xiii) and "other than State insurance" in s 51(xiv) of the Constitution by limiting Commonwealth power to make laws characterised as those concerning banking and insurance. Hence, on this submission, general State laws concerning assault, trespass, or defamation would not be invalid in their operation upon matters relating to federal elections. A State law concerning assault, trespass, or defamation that is characterised as a law in relation to an election would be invalid unless it "touched or concerned" federal elections only incidentally. In other words, the effect of the Commonwealth's submission was not merely that the alleged structural implication is derived silently from provisions that sit alongside the expressions of exclusivity in s 52. It was that the structural implication of exclusivity operates in a fundamentally different way from the other expressions of exclusivity within the structure upon which it was said to be based. That is not a promising foundation for a structural implication.
A final nail in the coffin for the structural implication submission is the lack of any logical or practical necessity for Commonwealth legislative power to be exclusive. The Commonwealth relied upon the express powers in ss 7, 9, and 29 of the Constitution, and the failure to include in s 9 the additional words "and manner" contained in cl 1 of Art I, s4 of the United States Constitution. In essence, this was a submission that the express conferral of some powers upon State parliaments in relation to federal elections indicated the exclusion of all other power.
It has been said that there are perhaps few maxims of interpretation that "have been more frequently misapplied and stretched beyond their due limits" than the maxim expressio unius est exclusio alterius, which treats the express mention of one thing as indicating the exclusion of another. Like all language conventions much depends upon context, including expectations based upon past experience. The context of the conferral of power in ss 7, 9, and 29 does not imply a general exclusion of power over federal elections. Instead, each section was included for specific reasons.
The power conferred upon the Queensland Parliament in the second paragraph of s 7 of the Constitution was an exemption, due to particular historical circumstances and until the Commonwealth Parliament otherwise provided, from the constitutional requirements of that section as to the State being a single Senate electorate. The scheme of setting out State legislative powers in s 9 of the Constitution operated to distinguish between the concurrent State power to make laws concerning the manner, or "method", of choosing senators and the State power to make laws for determining the times and places of elections of senators for the State. The latter power, like the power in s 12 of the Governor of a State to cause writs to be issued for election of senators for that State, is an exclusive State power. Section 29 of the Constitution created a concurrent power of the Commonwealth Parliament in relation to State divisions and the number of members chosen in each division for the House of Representatives "to meet certain contingencies", since the Constitution did not "raise any objection to the laws on this subject being made by the various states". The contingency for which the power was created, although it was not expected that it would be "exercised in any ordinary case", was to avoid the prospect of a "Massachusetts gerrymander". Both State and Commonwealth legislative power are also restricted by the final sentence, adapted from Art 73 of the Swiss Constitution, which provides that a division shall not be formed out of parts of different States.
The lack of logical or practical necessity for a structural implication of exclusivity of Commonwealth legislative power over federal elections is reinforced by s 109 of the Constitution. For instance, the Commonwealth's submission concerning the "challenge of producing a uniform federal scheme" is met by a Commonwealth law that entirely covers the "field" or subject matter of federal elections. That law would render inoperative any State law on that subject matter. Without any exhaustive Commonwealth law, as Queensland observed, the first federal election was regulated by a diverse range of electoral laws in different States. It does not assist any further in the exercise of interpretation to use, as the Commonwealth attempted in this case, extreme and unlikely examples, such as State legislation that is passed after the Commonwealth Parliament is prorogued, in an attempt to support a different interpretation of Commonwealth power.
The submission that Commonwealth legislative power over federal elections is exclusive must be rejected.
(iii) Are the amendments to the Queensland Electoral Act contrary to a reverse Melbourne Corporation implication?
The plaintiff advanced a different argument for the invalidity of s 275 of the Queensland Electoral Act. In a submission that was disclaimed by the Commonwealth, the plaintiff asserted that the Constitution contains a limited structural implication of Commonwealth governmental immunity into which s 275 of the Queensland Electoral Act had trespassed. The immunity upon which the plaintiff relied was not the limited immunity from discriminatory, non‑generalised laws affecting Commonwealth executive capacities. It was an assertion of an area of immunity for the Commonwealth polity from State laws and a co-relative limitation of State legislative power.
At the heart of the plaintiff's submission was the principle established by the decision of this Court in Melbourne Corporation. That principle is a constitutional intergovernmental immunity of the States in the sense that it is co‑relative to a lack of Commonwealth legal power. It was described by Stephen J in Koowarta v Bjelke‑Petersen as a limitation on Commonwealth legislative power derived from "the federal nature of the Constitution and which will serve to protect the structural integrity of the State components of the federal framework, State legislatures and State executives".
Although expressed in different ways over the years, the Melbourne Corporation principle was described most recently in the joint judgment of Hayne, Bell and Keane JJ in Fortescue Metals Group Ltd v The Commonwealth ("Fortescue") as requiring consideration of "whether impugned legislation is directed at States, imposing some special disability or burden on the exercise of powers and fulfilment of functions of the States which curtails their capacity to function as governments". This formulation of the principle in the joint judgment in Fortescue concerned only the effect of the impugned Commonwealth legislation on the States, which was the question in that case. However, in Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority, Brennan CJ expressly confined the principle to a constraint upon Commonwealth legislative power, saying that the Melbourne Corporation principle is "irrelevant to the scope of any State legislative power". If that were correct, it would be a sufficient basis, without more, to reject the plaintiff's submission. With respect, Brennan CJ's statement cannot be accepted.
The implication established in Melbourne Corporation derives from the assumption implicit in the text and structure of the Constitution that the Commonwealth and State governments will continue to co-exist as separate entities. There are, therefore, statements in Melbourne Corporation that support the symmetrical application of the implication both to protect the States from laws of the Commonwealth or other States, and to protect the Commonwealth from laws of the States. For instance, Latham CJ said that the Constitution "is based upon and provides for the continued co‑existence of Commonwealth and States as separate Governments, each independent of the other within its own sphere". Dixon J said that the "foundation of the Constitution is the conception of a central government and a number of State governments separately organized. The Constitution predicates their continued existence as independent entities." Starke J said that "neither federal nor State governments may destroy the other nor curtail in any substantial manner the exercise of its powers or 'obviously interfere with one another's operations'". And Williams J said that there arises from the very nature of the federal compact "a necessary implication that neither the Commonwealth nor the States may exercise their respective constitutional powers for the purpose of affecting the capacity of the other to perform its essential governmental functions". The symmetry of this underlying assumption has been repeated in subsequent decisions in this Court.
The assumption upon which the Melbourne Corporation principle is based supports an implication that constrains any State or Commonwealth power to make a law that is destructive of the continued co‑existence and independence of the Commonwealth and States as separate governments. That assumption, and associated implication, of a co-existing, independent Commonwealth polity is not negated by the existence of s 109 of the Constitution. That section, like others in the Constitution, is itself premised upon the assumption of the continued existence and independence of the Commonwealth polity. Nevertheless, the existence of s 109 may have an impact upon the magnitude of any burden that a State law imposes upon the Commonwealth polity.
As Kirby J observed in Austin v The Commonwealth, "it is unlikely that a frontal attack upon the existence of the States would arise in the form of federal law". The same is true of a State law that directly attacks the existence of the Commonwealth. The real difficulty in the application of the Melbourne Corporation implication arises because neither the implication nor the assumption upon which it is based is limited to the continued existence of the States and the Commonwealth. In two respects, both the assumption and the implication extend beyond ensuring continued co-existence: (i) the destruction of the continued co-existence of the polity extends to destruction of a capacity of the polity to function as a government; and (ii) destruction of that capacity of the polity is further extended to curtailment or weakening of the capacity of the polity to function as a government. Sometimes this is expressed merely as an "interference" with the polity's continued functioning as a government.
The two respects in which the assumption and the implication extend beyond a core implication of continued co-existence represent a significant inroad into the decision in the Engineers' Case. However, they were not novel extensions even at the time of the Melbourne Corporation decision. Several years after the Engineers' Case, in his dissenting judgment in Pirrie v McFarlane, upon which later decisions relied, Isaacs J described the "natural and fundamental principle" restricting the scope of powers conferred by the Constitution upon distinct governmental "organisms" that "neither is intended, in the absence of distinct provision to the contrary, to destroy or weaken the capacity or functions expressly conferred on the other".
Despite their longevity, the difficulty in defining the scope of these two broader aspects of the implication has been a substantial reason why the Melbourne Corporation principle "has proved insusceptible of precise formulation". Different expressions of the constraints upon the principle have been made over time. It has been said that the weakening must be of an "essential" governmental function. It has also been said that the other polity must be subject to a "special burden" or "single[d] out" or "aimed at" by the law in the sense that the law's "very object is to restrict, burden or control an activity of the States". However, such an object is a relevant but not determinative criterion. Emphasis has instead been placed on a difference between a law that affects the capacity of a State to exercise constitutional functions and a law that affects the "ease with which those functions are exercised". Or, in a formulation which might amount to the same thing, it was said by three Justices in Austin v The Commonwealth that the curtailment or weakening must be "significant".
All of these formulations can be reduced to a consideration of the magnitude of the burden upon the other polity's capacity to function as a government. That assessment will be one of "evaluation and degree". The magnitude of a burden has dimensions of both breadth and depth. A burden will be more deeply felt the more that it is targeted at the other polity and the more essential the governmental function that it curtails is to that other polity. For instance, in Clarke v Federal Commissioner of Taxation, French CJ gave the example of a Commonwealth law imposing a gubernatorial privileges tax that had little financial importance to the States or their Governors but which might nonetheless involve too great a legislative intrusion into the functioning of the States.
A burden will be wider the more that it curtails the operation of the governmental functions of the other polity. The curtailing of the governmental functions of the other polity might arise merely by curtailing the range of legislative policy choices of the other polity. Even more significantly, it might curtail the operation of key governmental institutions of the other polity.
If the magnitude of the burden on the other polity's capacity to function as a government is relevant then it should also be relevant to consider the significance of the law for the capacity of the polity enacting it to govern. Hence, in Austin v The Commonwealth, although dissenting in the result, Kirby J took into account, for the assessment of the significance of the effect of an impugned Commonwealth law upon the States, the importance of the "effective discharge by the Commonwealth of all of its national responsibilities, as envisaged by the Constitution".
The burden of the provisions of the Queensland Electoral Act and the Queensland Local Government Electoral Act was not deep. It had only an incidental effect upon a constitutional function of the Commonwealth, namely the regulation of federal elections. The interference was not specifically targeted at the Commonwealth; the "immediate object" of the provisions was not to regulate federal elections.
Nor did the provisions of the Queensland Electoral Act and the Queensland Local Government Electoral Act impose a wide burden on the operation of the Commonwealth government. The Queensland Electoral Act imposed no restriction upon the range of Commonwealth legislative policy choices. Further, the plaintiff pointed to no constitutional fact, and made no submission, to establish that the provisions would curtail or weaken the capacity of the Commonwealth to function as a government. For instance, the provisions did not burden the capacity of the Commonwealth to determine the number and identity of, and the terms and conditions of engagement of, high‑level public servants, judges, or politicians. They did not constrain the ability of the Commonwealth to conduct the affairs of government through means such as borrowing from and placing funds with private banks. Rather, a central purpose of the Queensland Amending Act was to reduce "the risk of actual or perceived corruption related to developer donations" and thus to increase "transparency and accountability" in State elections. It is unsurprising that the plaintiff made no submission that the functioning of the Commonwealth government was curtailed or weakened by any incidental effect of reducing corruption in federal elections.
Finally, the provisions of the Queensland Electoral Act and the Queensland Local Government Electoral Act had a real significance for the capacity of the State to function as a government. Although, as the plaintiff was at pains to emphasise, there were other laws that the Queensland Parliament could have passed to fulfil its legitimate purpose of regulating State elections without impermissibly impairing the constitutional functions of the Commonwealth, the choice of regime to regulate electoral donations was part of the functioning of the State as a government.
The plaintiff's submission that the Queensland laws contravened the reverse Melbourne Corporation implication must be rejected.
(iv) Are the amendments to the Queensland Electoral Act contrary to the constitutional implied freedom of political communication?
The plaintiff's submission that the amendments to the Queensland Electoral Act, but not the equivalent amendments to the Queensland Local Government Electoral Act, are invalid by reason of the constitutional implied freedom of political communication can be dealt with briefly. Subdivision 4 of Div 8 of Pt 11 of the Queensland Electoral Act was closely modelled upon equivalent provisions in the Election Funding, Expenditure and Disclosures Act 1981 (NSW). It shares the same core underlying purpose of "minimising the risk of corruption". A submission that the New South Wales legislation was contrary to the implied freedom was rejected by this Court in McCloy. The Explanatory Notes to the Queensland Amending Act noted the reliance that was placed upon the decision of this Court in McCloy.
The plaintiff did not challenge McCloy but, instead, sought to brush aside the decision, not yet four years old, on the basis that the legislative facts upon which that decision was based occurred in New South Wales. In Queensland, so the submission effectively went, things are done differently. The submission is in more than a little tension with the facts in the special case: (i) various findings by the Crime and Corruption Commission and its predecessors, referred to in the Explanatory Notes to the Queensland Amending Act, in 1991 and 2006 that candidates for local government elections had received significant donations from property developers; (ii) Crime and Corruption Commission findings in 2017 that one of the key concerns about political donations, namely the increase in the risk of corruption, "is heightened when donors have business interests that are affected by government decisions" and, at local government level, is "particularly associated with property developers"; (iii) investigations by the Fitzgerald Inquiry into a State Minister, Mr Hinze, revealing benefits he derived relating to property developments; and (iv) investigations by the Crime and Misconduct Commission between 2005 and 2010 into payments made to Mr Nuttall, a member of the Legislative Assembly, leading to conviction for offences including official corruption.
Even if, as the plaintiff effectively submitted, a metaphorical corruption-proof fence existed between New South Wales and Queensland, and also between local government and State government in Queensland, the plaintiff's submission is still misconceived. A reason why parliaments make laws is to shape behaviour. They can act prophylactically, by reference to possibilities and probabilities, as well as reactively. They can shape laws by reference to circumstances overseas. And they can, and often should, shape laws by reference to circumstances and conduct in other States. And, when legislating in response to the conduct of those who are not governed, "[t]here is no doubt of it; but in this country it is found good, from time to time, ... to encourage the others".
The plaintiff's submission really reduces to a claim that the result in McCloy does not dictate the result in this case because the circumstances underlying the same parliamentary purpose are different in Queensland from those in New South Wales. But the different underlying circumstances do not affect whether the law burdens the freedom of political communication. They do not affect the legitimacy of the law's purpose. They do not affect whether the law is suitable, in the sense of having a rational connection with its purpose. Nor do the different underlying circumstances affect whether there were alternative, reasonably practicable, means of achieving the same object but which have a less restrictive effect on the freedom.
The assessment of whether the law is adequate in the balance is the only possible area where different underlying circumstances could affect the process of reasoning concerning the implied freedom of political communication. But the plaintiff did not submit, and there is no reason to conclude, that there was any difference in importance placed by the Queensland Parliament from that placed by the Parliament of New South Wales upon the core underlying purpose of removing the risk and perception of corruption. And even if some lesser weight were placed by the Queensland Parliament upon this core purpose, once regard is had to the plurality of values that underlie the Constitution this would still be insufficient to establish such a gross or manifest lack of balance between, on the one hand, the foreseeable magnitude and likelihood of the burden upon freedom of political communication and, on the other hand, the importance of the legislative purpose.
The plaintiff's invitation to distinguish McCloy and to hold that the Queensland law infringed the implied freedom in this case is effectively an invitation to "innovate at pleasure" as a "knight-errant roaming at will in pursuit of his own ideal of beauty or of goodness". It should not be accepted.
The validity of s 302CA of the Commonwealth Electoral Act
(i) The Commonwealth Electoral Act and s 302CA
Part XX of the Commonwealth Electoral Act is entitled "Election funding and financial disclosure". Considered as a whole, the provisions of Pt XX create a regime for federal electoral purposes including: (i) the registration of political campaigners (Div 1A); (ii) election funding for unendorsed candidates, for unendorsed groups, and for "registered political parties" (Div 3); (iii) disclosure of donations to candidates, political parties, and political campaigners (Div 4); and (iv) disclosure of electoral expenditure (Div 5). The scheme of Pt XX involves two interrelated components: the prohibition upon certain political donations (Div 3A), and the disclosure of most other donations and electoral expenditure (Divs 4, 5, and 5A). The regime aims, by ss 302CA and 314B, to make these two components part of a single regime that regulates donations in relation to federal electoral purposes, although carving out, as far as possible, donations that are made for, or are used for, State electoral purposes.
Part XX of the Commonwealth Electoral Act, in the form described above, includes amendments made by the Electoral Legislation Amendment (Electoral Funding and Disclosure Reform) Act 2018 (Cth) ("the Commonwealth Amending Act"). The Commonwealth Amending Act introduced a suite of changes to electoral funding and disclosure. The Commonwealth Amending Act was described as having an intention to effect significant "reform [of] the electoral funding and disclosure regime in the Commonwealth Electoral Act 1918". The changes included a new registration regime and disclosure rules for third‑party campaigners, designed to achieve greater transparency, and the banning of certain gifts by foreign donors.
Part of that suite of changes introduced to the Commonwealth Electoral Act by the Commonwealth Amending Act was the introduction of a new Div 3A to Pt XX entitled "Requirements relating to donations". Subdivision A of Div 3A is entitled "Interpretation". It provides an outline of Div 3A, in s 302A, describing the Division as "regulat[ing] gifts that are made to registered political parties, candidates, groups, political campaigners and third parties". It describes the object of Div 3A, in s 302C(1), as to "secure and promote the actual and perceived integrity of the Australian electoral process by reducing the risk of foreign persons and entities exerting (or being perceived to exert) undue or improper influence in the outcomes of elections".
Most pertinently to this case, the suite of changes introduced by the Commonwealth Amending Act provides in s 302CA for the relationship between the Commonwealth prohibited donor regime and State and Territory electoral laws. The suite of changes also included the insertion in Div 6, entitled "Miscellaneous", of s 314B, which provides for the relationship between the Commonwealth disclosure regime and State and Territory electoral laws. Section 302CA, contained within the "Interpretation" subdivision of Div 3A, and s 314B provide generally for the extent to which the Commonwealth laws concerning political donations, both the prohibitions on foreign donations in Div 3A and the disclosure regime in Divs 4, 5, and 5A, are intended to regulate exhaustively the subject matter of donations to the relevant political actors.
Section 302CA of the Commonwealth Electoral Act is set out in full in other judgments in this case. It suffices to make reference to several key features of the section. First, the removal of State and Territory prohibitions applies to gifts given to, or received or retained by or on behalf of, political entities, political campaigners, or third parties. A "political entity" is defined in s 4 to include a registered political party. In testing whether s 302CA is valid, the submissions in this case generally, and conveniently, focused upon the application of s 302CA to registered political parties.
Secondly, the removal of State or Territory prohibitions or permissions on donations, and the limiting of the prohibition to those matters in Div 3A, applies only in the context of a federal election to those gifts (i) with terms that require or allow the gift to be used for the purposes of incurring electoral expenditure or creating or communicating electoral matter or (ii) without terms as to the purpose for which the gift may be used. In relation to those gifts that are not prohibited by Div 3A, but about which State and Territory prohibitions are removed, they remain subject to the applicable rules in Divs 4 and 5A concerning disclosure.
Thirdly, s 302CA(3) provides for three circumstances in which the State and Territory laws that would otherwise be excluded by s 302CA(1) will nevertheless operate. These carve-outs from the operation of s 302CA(1) were not included in the original version of s 302CA in the Bill that became the Commonwealth Amending Act. That original version of s 302CA was included in an exposure draft of proposed amendments by the Government to the first version of the Bill. However, the Joint Standing Committee on Electoral Matters heard evidence about the Bill, including from Professor Twomey, that although the Commonwealth Parliament can legislate to exclude State laws requiring disclosure "when the donation goes to the Commonwealth", the Commonwealth should not be "interfering with the state decisions as to how to regulate their own electoral systems"; the interference would be "inappropriate and arguably unconstitutional" if the "amount is actually used to fund state political expenditure". The Joint Standing Committee recommended, and the Government accepted, that the provisions should be amended expressly to "exclude the application of the Commonwealth law to any funds that are used in a state or territory election", explaining that "these provisions form an important part of the disclosure regime".
The first of the three circumstances where State and Territory laws are left to operate, in s 302CA(3)(a), is where the terms of the gift "explicitly require the gift or part to be used only for a State or Territory electoral purpose". The second, in s 302CA(3)(b)(i), is where the State or Territory electoral law requires "the gift or part to be kept or identified separately" in order to be used only for a State or Territory electoral purpose. The third, in s 302CA(3)(b)(ii), is where "the gift recipient keeps or identifies the gift or part separately ... in order to be used only for a State or Territory electoral purpose". A note and an example accompanying s 302CA(3)(b)(ii) make clear, in the interpretation of that sub-paragraph, that the sub‑paragraph is intended to restrict the removal of State or Territory regulation of gifts that may be used for federal electoral purposes if the gift is later kept or identified separately for use for State or Territory electoral purposes.
The example concerns a circumstance where, at the time that a gift is given, there is no expressed purpose for the gift. In the example, if the gift is kept separately and ultimately used for a State or Territory electoral purpose, then both the donor and the recipient of the gift must comply with State and Territory electoral laws concerning the giving, receipt, retention, and use of the gift. In other words, s 302CA(3)(b)(ii) has the effect of imposing a condition precedent upon State or Territory electoral laws that concern gifts that, when given, may still be used for federal electoral purposes. The condition precedent to the operation of those State or Territory electoral laws is that the gift is later kept separately for ultimate use for a State or Territory electoral purpose. At that later time of keeping it separately the condition precedent will be satisfied and the State or Territory electoral law will have retroactive operation.
(ii) The purpose of s 302CA of the Commonwealth Electoral Act
In Unions NSW v New South Wales, I explained the importance of distinguishing between a legislative purpose and legislative effects. This distinction is not novel. But it is important. A purpose is an object or aim. An effect might be foreseen, expected, or even considered inevitable. But foreseeability, or even belief in inevitability, are only factors from which an inference of purpose might be drawn. As with intention, if the inference is not drawn then, no matter how foreseeable or likely the effect, it is not the purpose of the legislation. In Unions NSW v New South Wales, I concluded that legislative amendments had the purpose, and not merely the effect, of quietening the voices of third-party campaigners relative to political parties and candidates. There was no other discernable reason for the change to the legislative regime.
In this case, ss 302CA and 314B of the Commonwealth Electoral Act, as part of the substantial package of amendments to reform the electoral funding and disclosure regime in that Act, have the effect of creating an exclusive regime of Commonwealth regulation of political donations that may be used for incurring electoral expenditure or creating or communicating electoral matter. Section 302CA was inserted as part of an "Interpretation" subdivision of Div 3A. It would be absurd to try to discern its purpose, or that of s 314B, independently of the remainder of that Division, or independently of the other amendments. The interpretation subdivision and the associated amendments introduced with s 302CA are inextricably linked to the regime of regulation of political donations and electoral expenditure including disclosure requirements and positive prohibitions on foreign donors in particular circumstances. Likewise, the subject matter of s 302CA is also inextricably intertwined with the regime of regulation of political donations and electoral expenditure in federal elections. Read as a whole, the scheme of regulation reveals no basis for an inference of a purpose to impair or weaken the ability of the States and Territories to regulate their own elections.
When one considers the aim, object, or purpose of the scheme of exclusive regulation, there may be a number of answers. One might have been to increase certainty by subjecting all domestic donors, but not foreign donors, to the same regime of disclosure as far as possible. Another might have been to strike a single balance between maximising the flow of funds for electoral purposes and encouraging transparency. And, in relation to s 314B, two purposes given in the extrinsic materials were to prevent discouragement of "persons or entities from making or receiving small donations for federal electoral purposes, where such donations are not required to be reported under Part XX of the Electoral Act", and "to ensure that ... the person or entity is not subject to duplicative reporting requirements". But there is no basis in the materials before this Court from which a conclusion can be drawn that the legislative purpose or aim of an exclusive scheme of regulation of Commonwealth donations, reflected in ss 302CA and 314B, was to impair or weaken the ability of the States and Territories to regulate their own elections. That impairment was an effect of regulating the unallocated middle. But it was not a legislative purpose.
Any possible inference that s 302CA had a purpose of impairment of the ability of the States and Territories to regulate their own elections is also substantially undermined by the history of the amendments to the original draft versions of s 302CA and s 314B in response to the concerns of the Joint Standing Committee on Electoral Matters about the "boundaries of [the Commonwealth] disclosure regime". The introduction of carve-outs for the further operation of State and Territory laws reveals an intention to reduce any restrictions upon the ability of the States and Territories to regulate their own elections, in the course of pursuing the exclusive scheme to fulfil legislative objects such as maximising the flows of funds, transparency, and certainty.
(iii) The attacks on s 302CA of the Commonwealth Electoral Act
For the reasons that I have explained, s 275 of the Queensland Electoral Act is a valid law. However, it is common ground that s 275, although validly made, would be inoperative by s 109 of the Constitution as it is inconsistent with s 302CA of the Commonwealth Electoral Act. Queensland sought to avoid that conclusion by submitting that s 302CA of the Commonwealth Electoral Act is invalid. Three reasons were advanced in this respect. First, it was submitted that if the Commonwealth Parliament had exclusive legislative power with respect to federal elections, then s 302CA impermissibly intruded into a corresponding area of exclusive State legislative power with respect to State elections. The premise of this submission, namely exclusive Commonwealth legislative power, has already been rejected. Secondly, it was submitted that s 302CA contravenes the Melbourne Corporation implication. Thirdly, relying upon the decision of the majority of this Court in University of Wollongong v Metwally ("Metwally"), it was submitted that s 302CA purports to override the temporal operation of s 109 of the Constitution and is therefore invalid. Aspects of these submissions were supported by each of the intervening State Attorneys-General. The Attorney‑General for the State of Victoria, and to some extent the Attorney-General for the State of Tasmania, sought to impugn the connection between s 302CA and federal legislative power in a different manner. First, it was submitted that s 302CA was beyond the core or incidental power of the Commonwealth Parliament. Secondly, in a related but potentially independent submission, it was suggested that the Commonwealth Parliament had an extraneous purpose in enacting s 302CA which meant that it was beyond power.
(iv) Section 302CA is within the power of the Commonwealth Parliament
It is necessary at the outset to explain (i) why the Commonwealth Parliament has the power to regulate donations to registered political parties which may be used, but are not required to be used, for federal electoral purposes, and (ii) the close relationship between the laws that collectively seek to make a system of regulation exclusive, which reveals the artificiality of concluding that some are beyond power but others are not.
Consider the following fictitious example. Suppose that an investigation revealed widespread corruption and undue influence in federal elections associated with large donations to political parties. The Commonwealth Parliament responds to this evidence of undue influence, in the sense of corrupting influence, by a law requiring donors to disclose their donations to registered political parties of more than $1,000 of funds that are required to be used in federal elections. But the widespread corruption continues. The donors evade the Commonwealth law and make the same donations, intended for use by the same registered political parties in the same way, with the same consequences. They evade the Commonwealth law by giving their donations without restriction. That is, the donations are not tied for use only in federal elections. An amendment to the Commonwealth law, capable of reducing the size of this gaping hole in the legislation, might be to require disclosure of all donations that may be used for federal electoral purposes.
In this fictitious example, the question of how far the regulation should go in order to combat the menace of corrupting influence is quintessentially a matter for political judgment. The regime hypothesised was one of disclosure only. At another extreme would be a regime of complete prohibition. An intermediate regime might be one of prohibition of some donations (foreign donors) and disclosure of others. The political judgment involved in defining the scope and boundary of the regulation might require balancing of matters such as ensuring a sufficiency of funds for political parties to promote their messages and any deterrent effect of dual systems of regulation of the same donation. The outcome of that balancing process might very well require that the Commonwealth law be made exclusive. That is hardly a judgment which courts are equipped to second-guess.
The plenary power of the Commonwealth Parliament relating to federal elections, including matters incidental or peripheral to the main subject matter, plainly permits it to pass such a protective law regulating the use of funds that may be used, but are not required to be used, by political parties contesting federal elections. In Smith v Oldham, Griffith CJ characterised the subject matter of the Commonwealth plenary legislative power deriving from ss 10, 31, and 51(xxxvi) of the Constitution in terms of the "regulation of the conduct of persons with regard to elections". More precisely, it might be expressed as the conduct of persons with regard to federal elections. And, as Griffith CJ also said, "[t]he main object of laws for that purpose [is] to secure freedom of choice to the electors". That object permits or requires laws that establish the machinery of elections and laws to prevent "intimidation and undue influence". In other words, the legislative power includes power to make laws that establish an electoral system and laws that regulate that electoral system by proscribing "conduct that interferes with the electoral system that Parliament has chosen". The power also includes laws that define the boundary or scope of the regulation, and which are therefore necessarily incidental to that regulation. That sense of "incidental" is distinct from the power in s 51(xxxix) of the Constitution, which is concerned with "incidental power" in the different sense of extending Commonwealth legislative power to matters that arise in connection with the execution of its powers. That "express incidental power" does not arise in this case.
Subdivision B of Div 3A of Pt XX of the Commonwealth Electoral Act involves provisions that are based upon the power of the Commonwealth Parliament to pass laws concerning funds that may be used, but are not required to be used, by registered political parties for incurring electoral expenditure in relation to federal elections. It includes prohibitions upon foreign donors and recipients of foreign donations, including a prohibition on foreign donors making gifts to registered political parties. There was no dispute that the provisions in Subdiv B are valid. And it was not suggested that those provisions are only valid because of a probability, rather than a possibility, that the foreign donor's donation would be used for the purposes of incurring electoral expenditure.
Division 4 of Pt XX is also based upon the premise that the Commonwealth Parliament has power to pass laws concerning funds that may be used, but are not required to be used, by registered political parties for incurring electoral expenditure in relation to federal elections. For instance, s 305B(1) provides that if a person makes gifts above the disclosure threshold to a registered political party during a financial year, the person must provide a return to the Electoral Commission within 20 weeks after the end of the financial year, covering all the gifts that the person or entity made to that political party during the financial year. Disclosure is required irrespective of the use to which the registered political party plans to put the funds, or to which it does put the funds. Although the disclosure regime operates even in circumstances of possible use of funds by registered political parties for electoral expenditure, there was no suggestion in this case that the disclosure regime was beyond the Commonwealth power to regulate the conduct of persons with regard to federal elections. In Actors and Announcers Equity Association v Fontana Films Pty Ltd, Mason J said that a mere "likelihood of the effect of substantial damage to the business of the corporation" would give rise to a "direct legal operation" upon a corporation sufficient to establish a connection with s 51(xx) of the Constitution.
The submission that the Commonwealth Parliament had no power to pass s 302CA of the Commonwealth Electoral Act is essentially a submission that although the Commonwealth Parliament can regulate the use of funds that may be used for federal electoral purposes, it cannot make that regulation exclusive. The Commonwealth submitted that if it has power to regulate that area then it must have power to make that same regulation exclusive of State and Territory laws. The Commonwealth withdrew an initial submission that it was unnecessary even to determine this question of power because any invalid part of s 302CA could be severed from the remainder and in that severed form s 302CA would nonetheless be inconsistent with the whole of s 275 of the Queensland Electoral Act.
The issue is thus whether s 302CA, by defining the boundaries of the Commonwealth laws in relation to donations for federal elections, has a sufficient connection with the plenary Commonwealth power to make laws relating to federal elections. There are two steps involved in the question of sufficiency of connection between s 302CA of the Commonwealth Electoral Act and the subject matter of s 51(xxxvi), picking up ss 10 and 31, of the Constitution, being the regulation of the conduct of persons with regard to federal elections.
The first step to determine the sufficiency of the degree of connection between the subject matter of a law and the subject matter of the head of power said to support it, is to characterise the subject matter, or essential meaning, of the law. The characterisation is ascertained by the legal relations, rights, duties, obligations, powers, and privileges that it creates. But those legal relations will not reveal the appropriate level of generality at which the law should be characterised and at which the subject matter should thus be identified. One clear guide to the level of generality at which the subject matter or essential meaning should be characterised, particularly in relation to purposive powers, is the purpose of the legislation. Since the level of generality of characterisation will be most important when the law is likely to fall within the incidental part, or periphery, of the head of power, the identification of purpose in those cases might often be essential. However, as Brennan J said in Cunliffe v The Commonwealth:
"The central and peripheral aspects of a power do not evoke different tests of validity; it is simply a fact of constitutional reasoning that connexion between a law and a head of power is more frequently revealed by purpose than by effect and operation when the law is on the periphery of the power."
Once the subject matter of the law has been characterised at the appropriate level of generality the second step is to assess the degree of connection which that subject matter has with the subject matter of the head of power. The required connection does not need to be strong. A connection will be sufficient if it is not "insubstantial, tenuous or distant". The real difficulty at this second stage lies in how to assess the sufficiency of connection. It is not necessary in this case to enter into the longstanding debate about the role of proportionality, whatever that term means in this context, in elucidating that connection. It suffices to say that the sufficiency of connection will often be apparent once the subject matter of the law has been characterised. For instance, a law requiring payment of a deposit upon nomination would generally be characterised as a law concerned with the nomination of candidates for election and it would be a law with a clear connection with the head of power for regulating the conduct of persons in relation to federal elections. But the same characterisation of the law might not be made if the legislation prescribed such a vast sum of money as a deposit as to suggest an additional subject matter in the character of the law. It might no longer be a law concerned with the nomination of candidates for election and might no longer have a sufficient connection with the head of power for regulating the conduct of persons in relation to federal elections.
As to the characterisation of s 302CA of the Commonwealth Electoral Act, the provision does not have a purpose independent of the rest of Pt XX, and particularly not independent of Divs 3A and 4. As I have explained, there could have been a multitude of purposes for s 302CA, and the equivalent s 314B, in creating and defining the exclusivity of the regime of Commonwealth regulation of political donations that may be used for incurring electoral expenditure. The Commonwealth's submission was that s 302CA had three purposes, being: (i) to provide certainty to participants in the federal electoral process about the applicable regulatory rules concerning donations; (ii) to ensure that participants in the federal electoral process are not starved of funds; and (iii) to facilitate participation in public debate through the making of donations.
Whether the law had all of these purposes or only some of them, I do not accept the submission of Victoria that the purpose for creating exclusivity of the Commonwealth regime was to intrude into the State sphere or to reduce State legislative power. There is no basis to suppose that this was the aim of the Commonwealth Parliament and every reason to suppose that it was not. Indeed, when the Joint Standing Committee on Electoral Matters expressed concern that the effect of the law might be seen as involving interference by the Commonwealth with State decisions as to how to regulate their own electoral systems, three significant exceptions were carved out from the exclusivity of the Commonwealth regime of regulation of donations that may be used for Commonwealth electoral purposes. The submission by Victoria thus impermissibly elevates an effect of the legislation to a purpose. Although it will be relevant if a law has a purpose to restrict a State governmental power, it is irrelevant if a law merely has that effect. As Professor Stellios explains:
"Clearly any law that is valid because, and only because, it is incidental to a subject of power will always invade an area that would otherwise be solely within State power, because the law, ex hypothesi, does not operate directly on the subject of the power. To bring in the notion of an 'invasion' of State power causes confusion."
There may be laws that are passed where there is no possible purpose or object to the law other than its effect. But that is not this case. This point can be clearly made by contrast with Victoria v The Commonwealth ("the Second Uniform Tax Case"), upon which Victoria relied. In the Second Uniform Tax Case, a majority of this Court invalidated a provision that prohibited a taxpayer from paying State income tax in any tax year until Commonwealth income tax was paid. The majority held that the Commonwealth provision was not within, or incidental to, the Commonwealth power in s 51(ii) to make laws with respect to taxation. In that case, the prohibition did not depend upon the amount of federal income tax for which the taxpayer was liable. It did not depend upon any competition between claims by the State and the Commonwealth. It was unaffected by solvency considerations. It had no concern with payment by the taxpayer of any other State debts. Dixon CJ thus characterised the purpose of the Commonwealth provision in that case as being "to make it more difficult for the States to impose an income tax", effectively by deferring the time for payment of State income tax. With that purpose, it is unsurprising that the characterised subject matter was too remotely connected with the head of power in s 51(ii). To adapt a rhetorical question posed by Dixon CJ, a purpose to impinge upon State powers might be discerned from the purported use of the telecommunications power in s 51(v) to prohibit a customer from paying a State debt until he or she paid a telephone account.
The circumstances of this case, and the purpose of s 302CA, are far removed from those in the Second Uniform Tax Case. It could hardly be said of s 302CA that, as Latham CJ said in Melbourne Corporation, "though referring to a subject of federal power", its purpose (what it "seeks" to do; what it is "aimed at or directed against") reveals that it is "really legislation about what is clearly a State governmental function" and unconnected to the subject matter of Commonwealth power.
Provisions such as s 302CA and s 314B, with purposes that require the creation and definition of the extent of exclusivity of a Commonwealth regime which is within power, are sufficiently connected with the head of power. The purposes of the qualified exclusivity are inseparable from the purpose of the regime. Almost by definition, the exclusivity provision will be incidental to, and supported by, the head of power that supports the regime. Hence, even in the majority in the Second Uniform Tax Case, Dixon CJ (with whom Kitto J agreed) and Taylor J indicated that they would have upheld legislation by which the Commonwealth conferred priority to its own scheme for the administration of assets over the scheme of a State or Territory. Similarly, in Bayside City Council v Telstra Corporation Ltd, five members of this Court said that a "law conferring upon [telecommunications] carriers an immunity from all State taxes and charges would be a law with respect to telecommunications services". The immunity in that case, from discriminatory burdens imposed by State laws, had a "direct and substantial connection with the [telecommunications] power". As McHugh J said, referring to some of the numerous cases in support of this proposition:
"A s 51 power also authorises a law that expressly limits the operation of a State law in relation to a subject matter authorised, regulated or prohibited under that head of power. This Court has held on many occasions that, where the Commonwealth has power to regulate an area, it has power to protect entities which operate in that area from the effect of State laws. The cases, where the Court has so held, include Australian Coastal Shipping Commission v O'Reilly, Botany Municipal Council v Federal Airports Corporation and Western Australia v The Commonwealth (the Native Title Act Case)."
Victoria submitted that the Commonwealth Parliament has no power to regulate registered political parties "in relation to every aspect of what they do". It may be accepted that such a law would be beyond power because its characterisation would be likely to be far removed from the regulation of the conduct of persons in relation to federal elections. It would be analogous to relying upon the external affairs power in s 51(xxix) to support a law requiring all sheep in Australia to be slaughtered if "some international convention ... required the taking of steps to safeguard against the spread of some obscure sheep disease which had been detected in sheep in a foreign country and which had not reached these shores". But that is far from the operation of s 302CA of the Commonwealth Electoral Act.
Section 302CA is a law closely tailored to the subject matter of the Commonwealth prohibited donor and disclosure regime, which is itself within power. As I have explained, the Commonwealth regime extends to donations that may or may not be used for the purposes of incurring electoral expenditure or creating or communicating electoral matter. Section 302CA does not extend beyond that regime. It creates exclusivity for the regime but also narrows the exclusivity of the regime in respect of the three significant carve-outs. It is within power.
(v) Section 302CA is not invalid for having an extraneous purpose
As explained above, the purpose of the Commonwealth Parliament in passing a law is relevant to ascertaining the character of the law in the first step of the process of determining whether there is a sufficient connection between the law and the head of power. As Dawson J said in Leask v The Commonwealth, although purpose has a role, "the test remains one of sufficient connection". However, at some points in oral submissions, Victoria appeared to elevate the role of purpose, at least in relation to laws that, when characterised, do not fall within the core of a head of power. Victoria submitted that the purpose of a law might, by itself, supply a sufficient connection to a head of power or, conversely, that some purposes require "much greater scrutiny" of the purported connection of the law to the head of power. In other words, on that submission, a purpose that is extraneous to the head of power might sometimes serve a greater, and more significant, function in acting as a sufficient source of invalidity. It is unnecessary to decide this issue in this case because, as I have explained, the purpose for which the Commonwealth Parliament enacted s 302CA was not as Victoria characterised it. It suffices to make brief observations about a potentially larger invalidating role for the Parliament's purpose in enacting a law in reliance upon a head of Commonwealth legislative power.
There are a number of circumstances where the use of a power for an extraneous purpose will invalidate the exercise of the power. In equity, the doctrine of fraud on a power recognises invalidity where "the power has been exercised for a purpose, or with an intention, beyond the scope of or not justified by the instrument creating the power". A similar doctrine is recognised in administrative law invalidating an exercise of statutory power where a substantial purpose for the exercise of a statutory power is a purpose ulterior to that for which the power was granted. If the command in the Engineers' Case were followed, and the meaning of the Constitution found by reading the Constitution "naturally in the light of the circumstances in which it was made, with knowledge of the combined fabric of the common law, and the statute law which preceded it", then it might be said that this fabric includes an implied constraint upon the use for extraneous purposes of purposive constitutional powers, like the same constraint upon other purposive powers in equity and under administrative law, whether at the core of the power or in its incidental aspects.
However, it may be that such a doctrine would have a limited operation. Such a doctrine could not arise other than in relation to purposive powers. And it might only apply where the predominant or only substantial purpose was the extraneous purpose. In Melbourne Corporation, Dixon J, although only "speaking generally", said that:
"once it appears that a federal law has an actual and immediate operation within a field assigned to the Commonwealth as a subject of legislative power, that is enough. It will be held to fall within the power unless some further reason appears for excluding it. That it discloses another purpose and that the purpose lies outside the area of federal power are considerations which will not in such a case suffice to invalidate the law."
In circumstances where: (i) s 302CA of the Commonwealth Electoral Act was not enacted for any improper purpose; (ii) there has been some doubt expressed about whether the power to regulate the conduct of persons with regard to federal elections is a purposive power; and (iii) there have not been any direct submissions on a doctrine of extraneous purpose, the existence and operation of such a constitutional doctrine should be left for another case.
(vi) Section 302CA does not contravene the Melbourne Corporation implication
The Melbourne Corporation implication, with its symmetrical operation upon the States and the Commonwealth, has been described earlier in these reasons. The control of the electoral processes of a State is a function of the State, the interference with which could threaten the functioning of the States as independent bodies politic. With their potential for corruption in a broad sense, political donations can "sap the vitality, as well as the integrity, of the political branches of government" and "threaten the quality and integrity of governmental decision-making".
The regime in Pt XX of the Commonwealth Electoral Act has the effect of imposing some constraints upon the ability of the States to function as governments. Section 302CA and s 314B have this effect by making exclusive the Commonwealth regime not merely in relation to donations that would most directly affect the interests of the Commonwealth but also in the unallocated middle. In the unallocated middle, the gifts may be used for the purposes of expenditure in elections of either polity, so the interests of the Commonwealth and the States are both directly engaged.
Given the potential importance of this area to the functioning of States as bodies politic, it may be that a Commonwealth law would be invalid if its effect were to occupy the entirety of this area with a significant detrimental effect upon the States' ability to function as governments. Invalidity would be even more likely if one purpose of the law were to impose a burden upon the States or, in other words, if its "very object" were "to restrict, burden or control an activity of the States".
However, there are three key reasons which, although individually insufficient, combine to prevent s 302CA from trespassing over the boundary of impermissibly impairing the capacity of States to function as governments. First, as I have explained, s 302CA is not targeted at the States. Although it has a detrimental effect on State legislative power its purpose is to ensure a single regulatory regime for donations in relation to federal electoral purposes. Whatever the purposes of that regime (whether to provide certainty, to prevent deprivation of funds to participants in the federal electoral process, or to facilitate participation in public debate through the making of donations), the purpose of s 302CA was not to restrict, to burden, or to control the States.
Secondly, the effect of the amendments to the original draft that introduced the three carve-outs in s 302CA(3) from the exclusivity of the Commonwealth regime do not merely reinforce the lack of a purpose to restrict or control the States. They also permit the States a significant margin to develop their own legislative regimes concerning donations relating to State elections. Section 302CA leaves intact the laws of New South Wales, Victoria, and South Australia.
Thirdly, there is the significance of the law for the capacity to govern by the polity enacting it, namely the Commonwealth. Just as the States have a significant interest in regulating electoral expenditure to secure the independence of their systems of government, so too does the Commonwealth.
(vii) Section 302CA is not invalid by reason of the Metwally principle
The next attack upon the validity of the Commonwealth legislation was the submission by Queensland that s 302CA is invalid because it seeks to override s 109 of the Constitution by purporting to give operation to State laws when s 109 had rendered them inoperative. This submission relied upon the decision of a majority of this Court in Metwally.
The background to the Metwally decision involved a decision by this Court on 18 May 1983 that provisions of the Anti‑Discrimination Act 1977 (NSW) ("the New South Wales Act") were rendered inoperative by s 109 of the Constitution due to their inconsistency with the Racial Discrimination Act 1975 (Cth). The effect of that decision was that there was no statutory foundation for an investigation under the New South Wales Act into Mr Metwally's complaints of racial discrimination against him by the University of Wollongong. However, by an amending Act that came into force on 19 June 1983 the Commonwealth Parliament amended the Racial Discrimination Act to provide that the Racial Discrimination Act "is not intended, and shall be deemed never to have been intended, to exclude or limit the operation" of a category of laws which included the New South Wales Act. Subsequently, Mr Metwally's complaints were upheld on 23 November 1983 by a tribunal established under the New South Wales Act. On the removal of the appeal by the University of Wollongong, a majority of this Court held that the amending Act did not make the New South Wales Act retroactively operative.
The essential reason for the conclusion of the majority, Gibbs CJ, Murphy, Brennan and Deane JJ, was that although a Commonwealth Act can have retroactive effect, it cannot contradict s 109 of the Constitution by retroactively endowing a State law with the operative effect of which it had been deprived by s 109. In the minority, Mason J and Dawson J (with both of whom Wilson J agreed) also did not deny that a Commonwealth Act cannot contradict s 109. But a reason for their dissents was that the Racial Discrimination Act had simply removed the inconsistency upon which s 109 operated. Without any inconsistency, the condition upon which s 109 depends was not satisfied.
The essential difference between the majority and the minority in Metwally is (i) whether "a law of the Commonwealth" in s 109 of the Constitution means only the content of that law at the time of the alleged inconsistency or (ii) whether it also includes content arising from subsequent, retroactive Commonwealth laws. The same issue would apply to "a law of a State". On the assumption of validity of retroactive laws, it is difficult to see why the content of laws to which s 109 refers would be confined to the first meaning if the purpose of s 109 is to resolve conflict between laws of different polities. But part of the reasoning of Gibbs CJ and Deane J in the majority was that the purpose of s 109 extends to inform the ordinary citizen which of two inconsistent laws he or she is required to observe. That purpose might support a narrow interpretation of "law" in s 109 as an existing social construct at a particular time upon which people arrange their affairs.
The Commonwealth directly challenged Metwally, relying upon the reasoning of the minority judges. Resolution of that challenge requires consideration of whether the purpose of s 109 extends to ensure that a citizen is aware of the law that he or she is required to observe, or whether that is merely a consequence or effect of s 109 in the usual case, reasonably expected and therefore presumed, of non-retroactive laws. Ultimately, that consideration is unnecessary in this case because Queensland's submission about the invalidity of s 302CA cannot succeed on either view of Metwally.
Queensland relied upon the retroactive operation of the carve‑out from the exclusivity of the Commonwealth regime created by s 302CA in s 302CA(3)(b)(ii). As I have explained, that carve‑out has the effect of imposing a condition precedent upon the operation of State or Territory electoral laws concerning gifts which may still be used for federal electoral purposes. Queensland's submission was that s 302CA(3)(b)(ii) thus creates a contingent inconsistency with State or Territory law, contrary to s 109 of the Constitution, which is concerned only with circumstances when a law of a State is actually inconsistent with a law of the Commonwealth. Unlike the answers to the questions given in the decision of the majority in Metwally, the alleged operation of s 302CA as creating a contingent inconsistency was said to render s 302CA invalid.
The most basic reason Queensland's submission cannot succeed is that the condition precedent in s 302CA(3)(b)(ii) does not create or remove any retroactive inconsistency and does not conflict with s 109 of the Constitution. Unlike the Commonwealth amendments considered in Metwally, s 302CA(3)(b)(ii) is not a subsequent, retroactive law that purports to "expunge the past". The effect of the provision is to allow State or Territory electoral laws to operate subject to a condition precedent upon gifts that, when given, may be used for federal electoral purposes. That condition precedent is that the gifts are later kept or identified separately in order to be used for a State or Territory electoral purpose. The condition precedent always applied, and applies.
Conclusion
I would have answered each of the questions in the special case as proposed by Gordon J.