Queensland’s ban on property developers making political donations is unconstitutional because it overreaches into federal elections, the High Court has heard.

The state laws began operating in October 2018 following an anti-corruption investigation and also cover industry representative organisations.

They make it a crime for a developer to make a political donation, a person to make a donation on behalf of a developer, or a person to accept a political donation made by or on behalf of a developer.

Before the full bench of the High Court on Tuesday, lawyers for former Liberal National Party president Gary Spence said the Queensland laws went too far because donations used in federal elections could be affected.

While donations from property developers are legal at a federal level, Jeremy Kirk SC, for Mr Spence, argued money given to state branches of political parties and used for national polls could be captured by the laws.

“It interferes in the federal electoral process,” Mr Kirk said.

“It reaches too far.”

Mr Kirk said the federal government had not banned developer donations, noting recent reforms which prohibit foreign money flowing into federal politics.

He said if both the Commonwealth and states regulated donations, federal laws should have precedence.

Mr Kirk also argued the laws undermine the federal government’s exclusive power to regulate federal elections.

On Wednesday, Mr Spence’s legal team is expected to argue the state laws are inconsistent with the implied constitutional freedom of political speech.

Similar laws apply in NSW, which were upheld in the High Court in 2015.

In its submission, the federal government has rejected the argument commonwealth electoral laws are undermined by the Queensland laws.

It also says the Queensland scheme is indistinguishable from that operating in NSW, which was found to be in line with the constitution.

The Queensland government has argued while the laws do “impose a burden of communication upon government and political matters for political parties and candidates as a result of the restriction upon the source of funds”, this burden is “indirect and insubstantial”.

It also says the laws level the playing field in terms of political donations, improve the integrity of the parliament and government of Queensland and help prevent corruption.

Mr Spence announced his resignation as LNP president in December last year, blaming the new laws, as he was also chairman of engineering consultancy firm PeakUrban.

He argued this would make him a “prohibited donor” subject to hefty fines and even prison time if he stayed in both roles.

The Tasmanian, South Australian, Western Australian, Victorian and ACT governments have also intervened in the case.

The hearing continues.