Two south-east Queensland mayors have avoided prosecution despite allegedly breaching the Local Government Election Act, as the Crime and Corruption Commission (CCC) says public perception of councils is "on the nose".

Queensland's CCC has made 31 recommendations to the State Government to clean up local government elections, following complaints about the 2016 poll.

Delivering the report, CCC chairman Alan MacSporran said public perception of local government was accurate.

"It's certainly at the very least a hotbed for perceived corruption and that happens when you have a lack of transparency," he said.

"Their perception [the public] is, and I think correctly, there must be something wrong here — and that's why it's sought to be covered up.

"The public is right on the money, frankly."

The CCC has recommended prosecuting failed Gold Coast mayoral candidate Penny Toland for allegedly not declaring more than $30,000 in donations and gifts from a union.

But Gold Coast Mayor Tom Tate will not be pursued, despite the report finding he failed to run a dedicated campaign bank account.

The CCC decided not to take action because of the "systemic nature of this issue" in the 2016 Gold Coast election, and because it was now past the 12-month timeframe a prosecution would need to have started by.

Moreton Bay Mayor Allan Sutherland has also avoided prosecution for paying for joint how-to-vote cards for himself and a number of other councillors.

The CCC said it was not in the public interest to prosecute because the how-to-vote cards were given the green light by the Electoral Commission Queensland (ECQ) and the conduct was widespread and had not been censured before.

The corruption watchdog has called for developer donations to be banned, a move which it says may need to extend to the state level.

The CCC also called for an expenditure cap to be set for local government elections, and it wants expenditure to be declared within seven days — or earlier if during the last week of a campaign.

Another recommendation goes to identifying groups of candidates by their behaviour, including whether they get funding from a common source.

The CCC also identified deficiencies in how the ECQ currently operates and has recommended changes to broaden its role.

Palaszczuk to bring submission to Cabinet on Monday

Premier Annastacia Palaszczuk said the State Government fully supported the key recommendations in the CCC report.

Ms Palaszczuk said key reforms, including banning developer donations and strengthening perceived conflicts of interest for councillors, would be addressed in coming days.

"I will not make rules for local councils that I am not prepared to follow myself, so any changes we make will apply to state, as well as local government," Ms Palaszczuk said in a statement.

Gold Coast candidate faces prosecution

Ms Toland is facing prosecution for allegedly failing to declare donations and gifts from the Construction, Forestry, Mining and Energy Union (CFMEU).

Ms Toland's lawyers say their client "vehemently disagrees" with the findings. ( Facebook: Penny Toland For Gold Coast Mayor )

The CCC has alleged Ms Toland received $38,241 worth of advertising and T-shirts made by the CFMEU, but failed to add them to a disclosure return to the ECQ because she did not know the extent of the campaign the union was running in her favour.

But the CCC said evidence given at the hearings showed she was aware of the campaign.

"Ms Toland's evidence that she was unaware of the expenditure and activities the CFMEU was conducting on her behalf does not seem credible," the CCC said.

In a submission to the CCC, Ms Toland's lawyers said their client "vehemently disagrees" with the findings and publishing the claims would tarnish her reputation.

Gold Coast Mayor questions donations focus

Cr Tate has defended his financial arrangements for the election campaign.

Cr Tate has questioned the focus on donations from the property industry. ( ABC News )

He said there were problems with the requirement that candidates use a dedicated bank account for their expenses.

"Take an example you jump in your campaign car, you go into the pumps station, fill the petrol and you pay with a visa card — you're in breach — now there is something not right there," he said.

"So I would say with hindsight would 90 per cent of councillors throughout the state make sure a dedicated account would be much more adhered to? The answer would be yes."

Cr Tate said he and other councillors would follow any changes to donation laws, but he questioned the focus on donations from the property industry.

"No matter what sector you're in, development, retail, or whatever is your political belief, do we want to curtail their right to support an ideology of a person that they are standing for?" he said.

"For instance in my part I stand for jobs for the next generation.

"Well, if somebody else who happens to be in the development industry wants to put their support behind somebody like me they should have the right to do so."

Gold Coast Deputy Mayor Donna Gates said "the city of Gold Coast has been exonerated" by the CCC's report.

A recent Four Corners story revealed Cr Gates had voted in favour of development applications linked to her campaign donors nearly 30 times since the 2016 election.

Each time, she acknowledged a potential conflict of interest.

Cr Gates said the CCC was wrong to suggest developer donations to council candidates posed a huge corruption risk and that the influence of councillors was overstated.

"The councillors do not have the majority say, that is a fatal error in my view, the majority say comes from the planners who do years of study and have a great deal of experience in making the recommendations to council," she said.

Ipswich councillor failed to operate dedicated bank account

The CCC found Ipswich councillor Paul Tully should have disclosed donations by three donors, into a bank account under the name of Goodna Community Fund.

The CCC found Cr Tully failed to operate a dedicated bank account for his re-election. ( ABC News: Nick Wiggins )

The commission determined there was sufficient evidence to refer this matter to the ECQ to consider prosecution proceedings "but noted that Cr Tully has lodged an amended disclosure return with the ECQ after receiving the draft reporter for the purpose of procedural fairness".

The CCC said "it would not be in the public interest in those circumstances to take any further action".

It also found Cr Tully failed to operate a dedicated bank account for his re-election and stated there was sufficient evidence to prosecute.

"However, given the systemic nature of this issue, the CCC determined to take no further action," the report stated.

The CCC found, based on the use of join how-to-vote cards, that a number of Ipswich candidates were part of an undeclared group promoting the election of candidates.

However, the commission decided not to pursue prosecution, as the time to do so had expired.

Poor governance of Logan Mayor's futures fund

Logan Mayor Luke Smith is also facing an ongoing investigation into allegations he attempted to unlawfully influence the outcome of council decisions on development applications that would be beneficial to his campaign donors.

Cr Smith received $377,833 in donations for the 2016 campaign. ( Supplied )

The ABC has reported in recent months on concerns raised over Mayor Smith's voting for planning changes that could favour developers who donated to his campaign.

The CCC report has criticised the Mayor's company Logan Futures, which was directed by two other people for the purpose of "handling the large amount of campaign funds".

Logan Councillor Darren Power has urged Cr Smith to stand aside until the CCC concludes its investigation.