A deal to block foreign donations in Australian politics has broken down over the inclusion of activist groups, with no agreement between the Coalition and Labor expected in a parliamentary report to be issued on Friday.
The cross-party committee considering the 2016 election was given a week-long extension for talks on the future of foreign donations to political parties and candidates, as senators worked to find a deal on which organisations would be impacted.
Fairfax Media has been told negotiations have broken down, with the committee report to be released on Friday morning to be accompanied by dissenting reports Labor, the Greens and Liberal Democratic senator David Leyonhjelm.
Labor believed an agreement had been reached to ban foreign donations to political parties, some trade unions and associated entities, but government senators on the committee sought inclusion of activist groups including GetUp! and environmental campaigners.
One Coalition source said a deal looked unlikely despite Prime Minister Malcolm Turnbull and Opposition Leader Bill Shorten both supporting a ban on overseas cash.
Coalition committee members have used hearings and submissions to highlight campaigning by GetUp! and other third-party groups, after a number of marginal seats were targeted during last year's election campaign.
National Party federal director Ben Hindmarsh had called for a ban on donations from foreign individuals and entities "that seek to interfere or influence our electoral system for their own purpose or for the purpose of another sovereign nation".
The committee has already recommended Australia's political campaign laws be changed to require all election materials carry consistent authorisation statements, with the same rules applying to text messages, social media posts, print and broadcast ads.
The Commonwealth Electoral Act does not distinguish between donors who live in Australia or overseas or between Australian citizens, non-citizens and organisations.
Parties and candidates are required to know the name and address of donors giving more than the reporting threshold of $13,200, while both donors and parties are required to submit an annual disclosure report.
A report by the Parliamentary Library last year said of comparable English-speaking democracies, only New Zealand allows foreign political donations to parties and candidates, capped at $NZ1500.
In 2010, the Gillard government introduced legislation that would have banned donations of "foreign property" but the bill was never introduced to the Senate. Similar negotiations between the Coalition and Labor in 2013 never resulted in reform.
The International Institute for Democracy and Electoral Assistance, an intergovernmental organisation promoting democracy, told the committee 63 per cent of established democracies have a ban on foreign donations to parties, while 49 per cent ban overseas cash going to candidates.
The institute, of which Australia is one of 30 member states, said any new rules should allow donations from Australian citizens living overseas who retain the right to vote, and suggests foreign governments and political parties could be explicitly banned.
GetUp! national director Paul Oosting said his organisation fully supported a ban on foreign political cash and the government shouldn't use activists groups as an excuse for not tightening the rules.
"It is worrying because we do need to have a ban on foreign money going to major political parties. Australia is one of the few countries in the world that hasn't already put in place such a ban because of the corrupting influence multi-national corporations play in our politics," he said.
GetUp! wants all donations above $500 to be publicly disclosed online in real-time and for a donation cap of $1000 for individuals and corporations.
Any corporation not registered in Australia and non-citizens or permanent residents would also be blocked under the group's proposal.