Crossbench MPs and billionaire Clive Palmer have united in furious opposition to electoral reforms unveiled on Friday.

The proposed legislation, which will come before parliament in its last sitting week of the year next week, proposes to cap donations to candidates and money spent on federal election campaigns.

Donors will be able to give no more than $20,000 in a calender year, indexed, and candidates will be limited to spending $800,000 in an electorate under the proposed legislation.

Senators spending will be capped at $200,000 per seat in a state, equating to a $9.2 million cap for NSW and $600,000 for the ACT.

The changes won’t come into effect before the next federal election, which is due by late May. They would be in place from July 1, 2025.

Unions and special interest groups such as Climate 200 will be subject to the laws, which have in-principle support from the Coalition.

There will be an $11 million spending cap for a federal campaign for organisations not running at an election, such as unions and lobby groups. The federal cap for registered parties will be $90 million.

Under the legislation, there will be more transparency about donations, with the disclosure threshold lowered to $1000 – indexed every three years – on top of real-time monthly reporting requirements.

This would increase to every week during an election campaign and every day in the week before and after polling day.

The amount the Australian Electoral Commission pays candidates per vote would increase from $3.50 to $5.

The government and the opposition can act with urgency when it comes to their own self-interest, but for struggling Australians they just kick the cans down the road.

— Dr Monique Ryan MP (@Mon4Kooyong) November 14, 2024

Independent MPs Zali Steggall and Kate Chaney criticised the legislation for shutting out competition and giving more public funding to major parties.

Chaney said Labor and the Coalition struck the deal because they were worried about the prospect of a larger crossbench, after a record number of independents were elected in 2022.

Another teal MP, Kylea Tink, said it showed the major parties were “running scared” from the independents’ growth.

“[This] bid by the major parties to rush donation reforms through parliament before Christmas should be seen as a cynical attempt at collusion to protect a waning political duopoly. Quite simply – this is the ‘legacy political brands’ running scared and trying to do everything they can to stop a political evolution,” she said on Friday.

“What the major parties don’t seem to understand is that after decades of being taken for granted this evolution in Australian politics is being led by grassroot community campaigns, which will not cower as major parties try to stop or outspend them. This evolution is happening whether the major parties like it or not.”

Independent senator David Pocock agreed big money shouldn’t buy elections, but said balance between a level playing field and protecting independents hadn’t been struck.

He chastised the government for reportedly seeking to rush through the legislation without a parliamentary inquiry, saying it was “damaging to our democracy” and the crossbench hadn’t been consulted in months.

At a time when public support for Australia’s major political parties is at an all-time low, the Albanese government’s deal with Peter Dutton to game the system on political donations and campaign finance is a cynical stitch up.

— Zoe Daniel MP (she/her) (@zdaniel) November 15, 2024

Meanwhile, Palmer – who spent tens of millions of dollars in 2019 to keep Labor out of office, before splashing more than $120 million in 2022 to get a single United Australia Party senator elected – has vowed to sue.

“This new legislation is designed to rig elections. It will also hinder the independents, the regular Australians, from standing for parliament, which is what the constitution was designed for,” he wrote on X on Friday.

“As an Australian citizen, I will challenge these unconstitutional acts which will suppress freedom. We have just witnessed with the results of the US election, that populations overwhelming want democracy and freedom.

“Labor and the Liberals working together on this issue is a disgrace. The only hope for Australian people is if the High Court looks at the constitution and the implied rights of freedom of speech.”

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— Clive Palmer (@CliveFPalmer) November 14, 2024

Employment Minister Murray Watt said Australia shouldn’t “go down the American path where we can see rich individuals effectively buy elections”.

“We are seeing an increasing arms race when it gets to political donations and the amount of money that’s been spent on election campaigns,” he told ABC TV on Friday.

“I think all Australians have an interest in trying to keep big money out of politics.”

The changes would mean everyone’s vote counted “rather than just the richest people in our communities”, Watt said.

He denied any deal to kneecap independents.

“People should be able to win elections on the basis of their policies, their campaigning, rather than the fact that they prepared to spend inordinate amounts of money and take massive donations,” Watt said.

-with AAP