A ban on receiving foreign donations should apply across the board to Australian political parties, associated entities and activist groups, the Liberal party has submitted to a parliamentary committee.

The Liberal party’s federal director, Tony Nutt, told the committee on Wednesday that a level playing field would mean applying the ban to groups such as GetUp.

Labor’s assistant national secretary, Paul Erickson, supported the level playing field in principle and consideration of extending the ban to associated entities or third parties undertaking campaign activities.

The joint standing committee on electoral matters is inquiring into foreign donations after reports that international environmental charities funded opposition to the Adani coalmine and concerns that Russia interfered in the United States presidential election in favour of Donald Trump, albeit through hacking rather than donations.

Nutt said that a foreign donation ban was a necessary prudential measure to prevent interference in elections by foreign entities, including states, who have “no legitimate role in our democratic society”.

The Liberal senator Linda Reynolds, the committee’s chair, asked both about the need for a level playing field and noted GetUp and the Australian Conservation Foundation received foreign donations.

Nutt replied that rules “should be set in such a way as to capture all participants” in the democratic process. “We would support a level playing field as a matter of principle.

“The quantums of money available to political parties – which people generally think are pretty large – are in fact reasonably modest compared to some of the resources of foreign entities and their capacity to affect public policy.

“If you can pump in a couple of million bucks to try and disrupt the Queensland government building a mine, that gives enormous assistance if you’re running some sort of global agenda on that issue.”

Asked about the fact activist groups only have to declare donations that relate to political campaigning, and not day to day expenses, Nutt replied the same rules should apply as apply to political parties, which have to declare all donations.

In response to a question about whether a ban on foreign donations to political parties could boost groups such as GetUp and environmental campaigners 350, Nutt warned of the risk of “unintended consequences” to inconsistent campaign finance.

He noted that reform efforts in the US had produced a system where parties were highly regulated but third-party Super PACs, which can raise unlimited sums, proliferate.

Nutt said any foreign donation ban should not apply to Australian residents overseas, dual citizens and enterprises that conduct business in Australia that employ Australians.

In his introductory remarks, Nutt recognised that activist groups and unions were “legitimate contributors” to political debates and stressing cross-party co-operation on reforms.

The comments were an olive branch after Malcolm Turnbull’s remarks to the National Press Club earlier in February that “Australians expect us to ensure that only Australians and Australian businesses can seek to influence Australian elections”.

The remarks raised concern in Labor because – although Turnbull said Australians exercised influence “via a political party, an activist group like GetUp or an association or a union” – he did not accord their rights the same status as those of business and individuals.

The committee’s deputy chair, Andrew Giles, told Guardian Australia that Labor did want a level playing field “to see our long-held position that foreign influence and money and doesn’t shape [politics]” reflected in law.

Giles said he looked forward to a constructive discussion on Labor’s bill proposing to ban foreign donations, which is already before the parliament.

In his evidence to the committee, Erickson accepted the need to ban foreign donations beyond those to political parties because otherwise foreign entities could “mask” donations by giving them to a third party.



“We have publicly advocated ... that this committee or the parliament looks at exactly how we might broaden the prohibition on gifts of foreign property to contemplate a scenario where foreign property might be gifted to an associated entity or third party undertaking campaign activities.”

Erickson accepted the principle of a level playing field, as it applied to foreign donations, but noted political parties, associated entities and other bodies running campaigns had different rights and responsibilities.

“It’s not as simple as enforcing one rule for all because not every actor is engaging from the same position.”

The committee will report on foreign donations by 3 March.