The High Court on Wednesday ordered a stay on the New South Wales law banning political donations by developers. Developer and former Newcastle mayor Jeff McCloy had moved the High Court to challenge the law, after the donations he made during the 2011 election campaigns brought him before the Independent Commission Against Corruption. The same law is also applicable to gambling and tobacco interests.

His lawyers argued before the court that the law restricts freedom of communication and is not helpful in preventing corruption. But this view has been rejected by the High Court.

The ruling also validated the caps on the maximum amount that can be donated to a candidate or a party, fixing it at AU$2000 and AU$5000 respectively.

"These are provisions which support and enhance equality of access to government, and the system of representative government which the freedom protects," Chief Justice Robert French said in a joint judgment with Justices Susan Kiefel, Virginia Bell and Patrick Keane.

In June, lawyers representing the NSW government defended the law, saying that it doesn’t impede the freedom of political communication since it targets only the source of funds provided by a group, keeping in mind bigger gains.

Lawyers for McCloy also said the law is coming in the way of the tobacco, liquor and gambling industries in making political donations. But in their submissions, they tried to point out that it was unjustified to ban a particular group of voters when the law did not have a legitimate end.

"I undertook this court case as I felt it was important to question the current law," McCloy said in a statement on Wednesday. "I believe that anyone regardless of his or her position is should be entitled to participate in the democratic process. The High Court has ruled otherwise and I respect the decision."

Opposition parties Labor and Greens said that the decision upheld by the High Court underlined the need for an immediate step by the federal government to extend the donation caps to the local government elections.

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