Updated political donations laws for 2026 Victorian election: implications for business

With Victoria's state election less than six months away, the Electoral Further Amendment Act 2026 (Vic) has reshaped the state's political donations regime. This Act followed the High Court’s decision in Hopper v Victoria [2026] HCA 11, which held that previous amendments introduced in 2018 restricted the implied constitutional freedom of political communication. 

The new regime imposes a $7,500 cap on political donations, bans foreign donations, mandates real-time disclosure and, significantly for business, applies retrospectively from 15 April 2026. Businesses that have made a political donation in Victoria since 15 April 2026, or which are planning to make a donation ahead of this year’s election, should review their donations policies and compliance procedures now. 

The High Court's decision in Hopper v Victoria

On 15 April 2026, the High Court unanimously declared that Part 12 of the Electoral Act 2002 (Vic) (Electoral Act), which dealt with political donations and other funding matters, was invalid.

The case concerned a challenge to Victoria's 2018 campaign finance reforms (2018 Amendments), which introduced a general cap on political donations of $4,000 (indexed to $4,970 for FY 2026) from a single donor over a four-year election period, a real-time disclosure scheme requiring donations above a threshold to be reported to the Victorian Electoral Commission (VEC) within 21 days, and increased public funding to offset the expected reduction in private donations. 

The 2018 Amendments also permitted registered political parties to appoint a ‘nominated entity’, with payments from that entity excluded from the general cap on political donations. The stated rationale was to accommodate existing arrangements between political parties and affiliated entities that managed financial commitments and held assets on the party's behalf. 

Critically, the eligibility criteria for a nominated entity differed depending on when the appointment was first made. Entities appointed before 1 July 2020 were eligible provided they operated for the “principal benefit” of the members of the registered political party, whereas entities appointed after 1 July 2020 had to operate for the “sole benefit” of members. 

The plaintiffs – an independent candidate and the founder of a newly registered party – submitted that the general cap, operating together with the nominated entity exception, was invalid because it impermissibly burdened the implied freedom of political communication. Applying the established three-stage test, the High Court held:

• The operation of the general cap and the nominated entity exception imposed a differential burden on the implied freedom. In practice, access to uncapped funding through a nominated entity was available only to the three major parties, each of which had appointed a nominated entity before 1 July 2020 and held substantial pre-existing assets.
   
• The purpose of the law – reducing the risk of corruption and undue influence in politics – was legitimate.
   
• Victoria conceded that it could not establish that the differential burden imposed by the different criteria imposed for nominated entities appointed before and after 1 July 2020 was appropriate and adapted to achieving the law’s purpose.

The Court found that, because the provisions were intended to operate as a package, no individual provision or division could be excised without fundamentally altering the operation of the remaining scheme. Part 12 was therefore struck down in its entirety, leaving Victoria, seven months before a general election, with no donation caps, no disclosure requirements and no prohibition on foreign money in politics.

The new regime

In early June 2026, the Victorian Parliament passed the Electoral Further Amendment Act 2026 (Vic). The amendments, which apply retrospectively from 15 April 2026, create a new political donations regime in Part 12 of the Electoral Act.

General cap on political donations and repayment obligations

The amendments impose a general cap on political donations of $7,500 per donor, per recipient, for each four-year election period, as well as a transitional cap of $5,030 for the 2026 election period running from 15 April 2026 to election day. 

To address the advantages of incumbent parties and candidates, eligible new parties and first-time independent candidates can now receive donations at double the general cap ($15,000 per election period and $10,060 for the 2026 election period). 

In assessing donations relevant to the general cap, donations to:

• the same registered political party, candidate, group, elected member, associated entity or third-party campaigner are aggregated;
   
• a party-endorsed candidate are aggregated with donations to the party; and 
   
• related bodies corporate are treated as donations to the same person. 

Donations and gifts received in the transitional period between 15 April 2026 and 9 June 2026 that exceed the general cap must be returned to the donor by 9 July 2026.

Repayments from nominated entities

The nominated entity exception has been abolished, with such entities now treated as associated entities that are subject to the caps discussed above.

By 28 November 2026, parties must repay amounts received from nominated entities between 25 November 2018 and 14 April 2026 that: (i) exceed the general cap; and (ii) remain in old state campaign accounts. 

Prohibitions on foreign and anonymous donors

All political donations from foreign sources are now prohibited. Donors who are natural persons must be Australian citizens or residents and entities must hold a relevant business number. Anonymous donations at or above $1,250 are also banned.

Disclosure requirements

Disclosure requirements have also been strengthened. Donations of $1,250 or more must be disclosed to the VEC within 21 days by both the donor and the recipient.  For donations made during the transitional period between 15 April 2026 and 9 June 2026, returns must have been lodged by 9 July 2026. The VEC must publish returns on its website within seven days of receipt. 

Penalties

The amendments impose significant penalties. Knowingly making or accepting an unlawful donation can result in fines of up to 300 penalty units (as at 1 July 2026 equivalent to $62,730) or two years' imprisonment or both, while schemes to circumvent the regime can result in fines of up to 1,200 penalty units ($250,920) or 10 years' imprisonment for individuals.

Further reforms and potential constitutional challenges

Further reforms appear likely. The Electoral Act itself requires an independent expert review to commence within one month of the November 2026 election. The review panel must provide a report within 12 months examining and making recommendations regarding the effectiveness of the Electoral Act and donations caps, electoral expenditure caps and alternative models of public funding.

A further constitutional challenge is also possible. Several features of the new regime, particularly the administrative expenditure funding available exclusively to parties with existing elected members, may create a fresh differential burden on the implied freedom, with the risk that the High Court may also determine them to be invalid for similar reasons to Hopper.

Implications for business

As the new regime applies retrospectively from 15 April 2026, businesses engaged in political activity in Victoria should carefully review all donations since that date. Among other things, businesses should ensure donations do not exceed the transitional cap of $5,030, were not made by a foreign donor, and were not made anonymously (if the donation exceeds $1,250).  

Given the complexity of the new regime, the significant penalties and the likelihood of further reform following the post-election review, businesses that routinely make political donations or participate in the political process should review and update their donation policies and seek legal advice tailored to their circumstances.