The Palaszczuk Labor government passed laws last year, backdated until before the 2017 Queensland election, banning property developers from donating money to state and local government politicians and parties.

Then-LNP president Gary Spence, also the chairman of engineering consultancy PeakUrban, launched a challenge of the laws in the High Court in mid-2018 and in December resigned his position on the LNP.

He said the laws prevented him from legally playing an active role in the leadership of the party ahead of the federal election due to his role in the property development industry.

Mr Spence has argued the Queensland ban on donations should be overruled because it flies in the face of an implied constitutional freedom of political communication.

However, in a submission to the High Court, the state of Queensland argued while there was an implied freedom of political communication, there was not a constitutional protection of political parties.

"The plaintiff [Mr Spence], or any property developer in Queensland, is free to spend an unlimited amount of money to participate in political discourse in Queensland," the submission, filed by crown solicitor Greg Cooper, said.

"The only limitation is that he may not make a donation to a political party."

Property developers were also free to communicate about politics and government, including influencing politicians about a point of view, the submission said.

The state of Queensland, the defendant in the case, said the LNP, or any political party in Queensland, could reconstitute itself as two separate entities, one to promote candidates in federal elections and one for state and local elections.

"The entity with the object of promoting federal candidates would not be caught by the Queensland legislation," its submission said.

Commonwealth Attorney-General Christian Porter said Queensland's laws were invalid because state parliaments had no power to make laws which affected donations for federal elections, although that was disputed by the state of Queensland.

After an investigation, the Crime and Corruption Commission recommended property developer donations be banned for councils but Premier Annastacia Palaszczuk announced that would be extended to state politics.

"I will not make rules for local councils that I am not prepared to follow myself," she said in October 2017.

The case is due for a hearing of the full High Court in Canberra in March.