The government is being pushed by crossbenchers in both chambers who profess a fear of a major party "stitch-up" over electoral reform before the next federal election.

The Fair and Transparent Elections Bill, sponsored by by independent MP Kate Chaney, Greens senator Larissa Waters, and independent ACT senator David Pocock, offers a range of significant electoral reform measures including a major donor cap to prevent an individual from donating more than $1.5 million. However, as a non-government bill, it will not get up without government support.

Mr Albanese pushed back in question time on Tuesday when asked about reform by Ms Chaney, saying Labor has been reforming political donations since the Hawke and Keating governments.

"That was then overturned by the Howard government. Then there was reform under the Labor government. Then those [were] overturned further on," he told Parliament.

"We are consulting very broadly, including with members and representatives of the crossbench and the minor parties as well as across the major parties to see if reform as proposed by the Minister, Minister Farrell, can receive very broad support.

"Because one of the objectives that we have here is to land reform that stays, not reform that comes and then goes with changes of government."

The Prime Minister accused the crossbenchers of political lobbying and stated he backed the need for transparency when it comes to political donations.

He said there "needs to be a stopping" to the "sort of largesse that we saw from Clive Palmer during the last two election campaigns."

"I don't think it is tenable at all to have the sort of dollars washing around the system such as occurs in the United States. I think that is unhealthy. I think it undermines our democracy," Mr Albanese said.

A donor cap of $1.5 million would curtail the activities of mining billionaire Clive Palmer. His mining company Mineralogy donated more than $7 million to his United Australia Party in the last financial year, while he gave a nearly $117 million donation before the last election.

The crossbenchers also said such a cap would have stopped large donations from Visy Chair Anthony Pratt, the CEO of Atlassian Scott Farquhar, and donations from at least one union.

Senator Waters said they "rightly fear that they're stitching up a deal with the opposition" over electoral reform to "shore up the two parties and lock out everyone else".

Many of the independents elected in May 2022 benefited from the climate and integrity-focused funding vehicle Climate 200.

Ms Chaney said the cap model was "fair" and would apply to all donors equally, including Climate 200.

She rejected that talk of the need for bipartisan support as an "agreement between the two parties."

"Let's make that a public discussion," she told journalists in Canberra. "At the moment what we're hearing is we'll work out what the bill is going to look like and we'll introduce it and you can take it or leave it and I don't think that's good for democracy."

The crossbench bill also donations from social harm industries and government contractors, proposes a real-time donation disclosure threshold of $1000, tightens political donation definitions, allows only taxpayer funds for election advertising, and moves on data harvesting by major parties in mailing out postal vote forms.

The Special Minister of State who deals with electoral matters, Don Farrell said the government is acting on the recommendations of the bipartisan 15-month post-election inquiry by the Joint Standing Committee on Electoral Matters which had strong recommendations for donation and political advertising reform as well as the new ACT senators.

It also recommended the introduction of donation and spending caps for elections, significantly lowering the donation disclosure threshold to $1000 and introducing laws banning false information in political ads.