Legal experts believe the ACT government's "odd" decision to remove caps from political donations could invite big donors to try to gain influence over government decisions once again.
Attorney-General Simon Corbell announced on Thursday the Labor government would be scrapping the $10,000 donation limit for ACT elections and quadrupling the amount of public funding parties receive per vote, from $2 to $8.
Based on 2012 election results, this would deliver more than half a million dollars in additional taxpayer money to both major parties on polling day.
University of Sydney constitutional law professor Anne Twomey, who prepared a report on electoral law for former NSW premier Nathan Rees, said she didn't believe it was healthy for democracy to remove donation caps.
"Donations can still be used to fund parties, including travel expenses, research, policy development, staffing and all those sort of things. It may provide incentives for people in government to be influenced by donors," she said.
"It's not a good thing to remove caps on donations, it creates the unequal playing field again where some people can gain more influence than others,"
Professor Twomey said if the amount of public funding was being raised to such high levels, she didn't understand why the donations cap had to be removed.
"Having a system where people can make very large donations to political parties does have the possibility to corrode confidence in the system," she said.
University of Queensland professor of law Graeme Orr said the new electoral laws sounded "slightly cartelistic", describing their removal of donation caps as "odd".
"I'm not sure what their rationale is for undoing donation caps," he said. "It's like saying the principle isn't worth it or we can't catch all murderers so we do away with the rule of law.
"It is true that donation caps aren't always easy to enforce because by their nature they are behind-the-scene transactions, whereas expenditure is public.
"[Removing donation caps] is a very odd thing to do if you're ramping up public funding."
A spokesman for Mr Corbell said the government believed the existing donations limit created an unintended incentive for donors to look for ways to circumvent the caps.
"It is more effective to limit electoral expenditure, impose expenditure caps that are enforced and ensure an effective reporting regime to provide transparency," he said.
The spokesman said the large increase in public funding at elections had achieved a balance between public and private funding and meant candidates would not have to seek as much from private donors.
"Capping the amounts that can be expended on election campaigns together [with] increasing public funding and maintaining robust reporting requirements are a balanced approach to maintaining a transparent and accountable electoral system," he said.