State bans on political donations from developers and stricter caps on donations, expenditure and disclosure will be overridden by new Coalition amendments to a campaign finance bill, academics have warned.

Prof Joo-Cheong Tham, of the University of Melbourne, has said the amendments would undermine states’ ability to “protect the integrity of representative government from the dangers of political money”, thwarting cases such as the Operation Spicer investigation into the New South Wales Liberal party allegedly taking developer donations in breach of state laws.

The amendments to the electoral funding and disclosure bill – released by the Coalition for consultation and now before the joint standing committee on electoral matters – caught Labor by surprise because they were not recommended in a bipartisan report agreed in April.

Under the two new amendments donors would gain immunity from state and territory laws prohibiting gifts and imposing obligations to disclose donations, provided there is a connection to federal election spending.

The amendments reverse the current position – expressed by the Queensland supreme court in the 2018 Awabdy decision – that federal donations laws do not override state laws, which can set more stringent disclosure requirements than the federal threshold of $13,800.

In a submission to the committee, Tham warned that the immunity is triggered if donations “may be used” for commonwealth electoral purposes.

“Hence, amounts to state-based political parties which are made without any conditions would trigger the immunity,” he said.

Tham said the federal law would “significantly preclude the operation” of state laws that cap electoral expenditure, caps donations, ban foreign donations and regulate other special categories of donors.

Tham told Guardian Australia that – given the breadth of the immunity – property developers could donate to the NSW Liberal and Labor divisions to spend “as they see fit”, which would trigger the immunity and “preclude the operation of NSW laws”.

Tham’s submission suggested the changes benefit major parties that fight both federal and state elections and warned parties could ask contributors to make “unconditional contributions” to attract the immunity from state laws.

Prof Graeme Orr, an electoral law expert at the University of Queensland, told Guardian Australia the Coalition had “at the last minute” included sections that would “limit existing and future state and territory laws”.

“This will reduce transparency, which is ironic because the whole point of this bill is it was supposed to be about increasing transparency,” he said.

Orr agreed with Tham’s conclusion that “all the parties need to do is to make sure their donors don’t specify they want their donation spent for state purposes or national purposes” to attract an exemption from state law.

“States won’t be able to demand a ban on property developers, for example.”

The explanatory memorandum for the amendments states that the immunity “will not apply to gifts that are only able to be used for exclusively state electoral purposes”.

It said the purpose of overriding state disclosure laws was to prevent people from being discouraged from making small donations below the federal threshold.

“It is also intended to ensure that, where a person or entity is required to report [under federal law] … the person or entity is not subject to duplicative reporting requirements under state or territory law.

“The section only applies where, broadly speaking, the donation or amount is or may be used for commonwealth electoral purposes.”

The electoral funding and disclosure bill was first introduced by the Turnbull government in December to ban foreign political donations. A bipartisan committee report in April called on the government to rewrite the bill to narrow the definition of political expenditure and make it less likely to harm advocacy by civil society groups.

Labor MP Andrew Giles, the deputy chair of the committee, said he was encouraged the government had listened to its concerns and was “hopeful that this parliament can progress vital donations reform”. Tham also said he “broadly welcomes” the other amendments which enact those proposed changes.

Giles said further hearings next week would ensure amendments do not produce “unintended consequences”.

“I’m aware of some academic concerns around potential impact on state laws and [am] keen to understand how this might be addressed.”