The Liberal senator Cory Bernardi and Greens leader Richard Di Natale have joined two Coalition ministers in calling for donations to be limited to individuals on the electoral roll.

Labor is in favour of a ban on foreign donations, but the call to limit donations to individuals on the roll goes far further and would in effect ban foreign, corporate and union donations.

Opposition leader Bill Shorten has said there is now a “coalition of the willing” to ban foreign donations, but has refused to sack Sam Dastyari after revelation of gifts from Chinese-linked businesses to the Labor senator and shadow consumer affairs minister.

The attorney general, George Brandis, has refused to weigh in on the reform debate, claiming the Dastyari case was different to donations, which he said were subject to a strict regulatory regime.

Bernardi told ABC’s AM on Tuesday “donations should only be made to political parties by those that are registered on the Australian electoral roll, they should be capped to a finite amount and they should only be made by individuals”.

“It’s wrong for substantial amounts of money from foreign entities in non-democratic governments to flow into [the] Australian body politic,” he said.

Malcolm Turnbull has consistently backed the principle of limiting donations to enrolled individuals, which would ban donations from corporations – Australian or foreign – as well as unions.

But the change faces constitutional issues because the high court found in 2013 that a New South Wales law limiting donations to individuals breached the implied freedom of political communication.

Bernardi joins the trade minister, Steven Ciobo, the transport minister, Darren Chester, and the backbench MP Craig Kelly, who have openly canvassed allowing political donations from individuals on the electoral roll only.

“I like the idea that if you don’t have a vote in the parliament or at the election that you don’t actually get to donate,” Kelly told Sky News on Monday. “It’s something we’re looking at.”

On Monday Di Natale wrote to the government and opposition calling for “an end to donations from foreign entities and corporations”.

“We also want strict caps from not-for-profit organisations and individuals on the Australian electoral roll.”

In comments on Radio National on Tuesday, Di Natale extended the proposed ban to all donations from foreign, corporate and third-party entities.

“I think we need to have a system of publicly funded election campaigns,” he said. “If individuals want to make a donation, they should be able to make a small donation, a capped amount, limited to individuals on the electoral roll.”

Let's ensure the only people donating to political parties are individuals on the electoral roll. – @RichardDiNatale — GreensMPs (@GreensMPs) September 5, 2016

The comments mark a departure from Greens policy which suggests donations from not-for-profit organisations should still be allowed, but capped.

Di Natale said third-party groups, such as GetUp or the Minerals Council, would still be able to conduct their own political campaigns because it is “very hard to put limits on what third parties can do in their advocacy”.

Dastyari is under fire after it was revealed Chinese business interests had paid a $40,000 legal bill and a $1,600 travel bill for him, and given him two bottles of Grange wine. He declared the gifts, including the wine, which he then donated to charity.

After receiving them, Dastyari was quoted in a Chinese media report as saying that the South China Sea dispute was a matter for China and Australia should stay neutral. He has since denied holding a different position than his party on the dispute.

Brandis told ABC’s AM on Tuesday that a ban on foreign donations was “a different conversation” to the controversy around Dastyari, because it related to a gift, not a donation. He said political donations were subject to “extensive regulation and an extensive integrity regime” and gifts were not.

“I can understand why people like [the shadow special minister of state] Stephen Conroy are trying to change the subject,” he said. “I’m not going to change the subject. This is about one particular individual – Sam Dastyari – who has accepted money from an entity ... that is effectively controlled by the Chinese state.”

Brandis said that if Labor were in government “you’d have a person sitting around the cabinet table who is in the pay of a foreign power, and Bill Shorten says that’s acceptable”.

The attorney general repeated calls for Dastyari to stand aside or be sacked.

Bernardi told Sky News on Monday he was “amazed” Labor was defending Dastyari.

“They are saying, yes, he has done the wrong thing, he has made a mistake, but he disclosed it and it’s all OK. I mean, that sets a new level of sleaze.”

He said NSW Labor had “a culture where they’ve never had to pick up the tab for anything – they get other people to pick up their bills”.

At a media conference on Tuesday, Shorten said he has counselled Dastyari severely over his “imprudent decision” but he was prepared to give the “junior senator” a second chance.

Shorten queried why the government was unwilling to ban foreign donations when it had a “coalition of the willing” from the Greens on the left, Labor, and its MPs on the “far right”.

Conroy has claimed that the Coalition’s standard would raise questions about whether the foreign affairs minister, Julie Bishop, has been compromised by foreign donations.



He referred to reports that Chinese business interests had donated $500,000 to the West Australian branch of the Liberal party and that Bishop received a tablet computer and free trip to China from Huawei.

Bishop has said the donations were a matter for the WA Liberal party. Guardian Australia has contacted her for further comment on the Huawei gifts.

“It’s time Mr Turnbull put up or shut up – either he supports Labor’s call for a ban on foreign donations or he proves that he is totally beholden to the chequebooks of the Liberal party’s foreign-backed donors,” Conroy said.