The New South Wales Government is again going into battle against unions, to try to slash their influence on election campaigns.

Premier Gladys Berejiklian on Tuesday announced an overhaul of electoral funding laws, which would more than halve the amount of money unions and other third parties are allowed to spend on state elections.

Under current laws, the amount that third parties can spend on election campaigns is capped at $1.2 million each, but the legislation proposes to slash that to about $500,000.

The move is part of a broader package of measures, which the Premier said was aimed at reducing corruption and undue influence in elections.

"Our reforms will drive greater integrity, transparency and accountability in our electoral funding regime, and help protect our democratic values and freedoms," Ms Berejiklian said.

But Unions NSW secretary Mark Morey said trying to curb union spending was a cynical move from a government worried about losing the next election.

"The Government is seeking to silence their critics," he said.

"Their side of politics has access to large sums of money from corporate donations, working people have to pool their money in order to have a voice in democracy."

The State Government previously banned unions and other third parties from making political donations, but those laws were overturned by the High Court, which ruled they were undemocratic.

During the 2007 state election, unions ran expensive campaigns targeting the Federal Government's unpopular WorkChoices policy, which Liberal party strategists believe badly damaged their party's prospects in the state vote.

The Government will introduce its legislation to overhaul electoral funding later this week.

It also includes:

Introducing new caps on council elections

Making it compulsory to disclose all donations above $1,000 within 14 days, during the six months before a state election