Facebook "demoted" thousands of posts during the federal election to reduce the prominence of false warnings that Labor would introduce an inheritance tax, and in two instances blocked mass networks of groups and people who were misleading voters.

A death tax meme that went viral on Facebook. Credit:Facebook

The social media giant revealed fresh details on election misinformation in a submission to a federal Parliament inquiry into the 2019 election and also defended its handling of the rampant inheritance tax falsehood.

But Labor issued a warning about the impact of social media on the election outcome, using its submission to call for a "thorough examination" of the digital platforms and focus on the way "malinformation" could influence voters.

Labor also called for reforms to ensure elections were protected from interference from "home and abroad", a real-time donation disclosure scheme and limits to the level of campaign expenditure through spending caps.