Victorian taxpayers will spend $45 million funding political campaigning every four years, under a donations shake-up announced by the Andrews Government.

Key points: Political donations capped at $4,000 every four-year election cycle

Political donations capped at $4,000 every four-year election cycle Donations over $1,000 to be publicly disclosed

Donations over $1,000 to be publicly disclosed Foreign donations banned

Foreign donations banned Third-party groups to disclose campaign spending over $2,000

A bill promised by Labor last year and now put forward in Parliament bans foreign donations and introduces caps and new disclosure requirements.

Donations to political parties, their associated entities and third-party campaigners will be capped at $4,000 each four-year term.

Anything over $1,000 must be disclosed and published on the electoral commission website within a month.

The changes also capture third-party groups such as Get Up or local lobby groups, which will have to declare spending over $2,000 on political campaigning.

Special Minister of State Gavin Jennings said the bill would increase transparency.

"We are confident that that will change once and for all the nature of concern in our community about the potential for political influence and contamination of the decisions of government," he said.

"So anyone who tells any member of our community how to vote, and who they should vote for and who they shouldn't vote for — if you've spent more than $2,000 on that political activity, then you will need to provide advice to the electoral commission about how much you've spent and where that money comes from."

But the loss of private donations means the cost of election campaigns will shift to the taxpayer, with the changes costing $45 million over each four-year cycle.

Every MP will receive $40,000 a year for administration costs, then extra money will be doled out to each party based on the number of votes they receive.

A lower house vote will be worth $6 and an upper house vote $3.

Scrutiny on fundraising events

Mr Jennings said that funding would be tallied up after the November election.

Political signage from parties and lobby groups will be restricted at polling booths. ( ABC News: Kathy Lord )

"Public funding will be increased to make up for the shortfall in what will be the donation loss," he said.

Questioned about how the laws would work for fundraising events, Mr Jennings admitted there would be an onerous accounting task ahead.

He said fundraisers could not evade the rules by charging $100 for a ticket and serving a $4.95 meal.

"If the happy meal was the only thing that you actually benefited from the event, so in fact there's no entertainment, there's no venue costs, then the answer to your question is yes," he said.

"Every single dollar that is not accounted for from the value of what is is the venue, the entertainment, the meal costs."

Greens want property developer donations banned

While the taxpayer will foot the bill for political campaigning, other moves by the Andrews Government will likely limit spending.

Plastic bunting will be banned and the number of political posters limited outside polling places.

"We're stripping away what posters can be put around polling stations, so that a candidate can have a nice frame of themselves … to support their candidacy, but nothing like we've seen previously," Mr Jennings said.

"We actually think voters will like that because in fact they will not be bombarded with visual material on their way to polling stations."

The Greens said they would scrutinize the bill to look for any loopholes.

Prahran MP Sam Hibbins said the Government's changes might not go far enough, and should consider banning property developers and other vested interests from donating to political parties.

"You just don't want these conflicts of interest," he said.

"It could be particularly relevant at an individual campaign level, it could be particularly relevant at a local government level, which I don't think is captured from this bill.

"So we'll be looking through the bill in detail and seeing whether any improvements can be made."

