Osmond Chiu, writing for the China Matters think tank, says Australia's parliament is less representative than comparable English-speaking Westminster democracies, which has led to "more disconnected, myopic and polarised debates about race and national identity".

"Australian politics is too white. This is embarrassing," Mr Chiu wrote.

"We cannot be 'the most successful multicultural society in the world', as former prime minister Malcolm Turnbull wrote, if our institutions do not reflect Australia's cultural diversity."

Just 4 per cent of Australian federal MPs have non-European heritage.

In comparison, one in 10 MPs elected in the recent British election are from black and minority ethnic backgrounds. In Canada, it is 15.1 per cent.

However the true scale of the underrepresentation is unknown as Australian political parties do not measure cultural diversity, Mr Chiu said.

Chinese-Australians also face extra hurdles to enter politics due to the growing perception that those with strong ties to the Chinese community could be associated with the Communist party of China.

Hong Kong-born Liberal politician Gladys Liu has been under siege for her alleged links to the Chinese government's propaganda arms.

Labor became embroiled in a scandal of its own, after Chinese billionaire Huang Xiangmo delivered a $100,000 donation to its NSW headquarters in an Aldi shopping bag.

Mr Chiu also said political parties did not see preselecting Asian Australians as electorally advantageous due to the perceptions around foreign interference.

Instead, Chinese subsets of political parties were seen as little more than fundraising vehicles.

"Parties have established associated groups, for example, Liberal Party Chinese Council or Sub-Continental Friends of Labor, but these are primarily vehicles for fundraising with no role in party decision-making," he wrote.

"These groups provide only a limited role for individual party members to step up."

The lack of diversity meant Australia struggled to deal with complex policy problems, like foreign interference.

"The homogenous nature of Australian politics is one reason why politicians find it difficult to deal with issues like foreign interference because there is insufficient cultural and political knowledge of the foreign entities the government seeks to legislate against," Mr Chiu said.

He said this should be addressed by establishing a federal anti-corruption commission to stamp out issue of undue political influence, and capping political donations.

There should also be quotas for diverse candidates in winnable seats, as well as training and mentoring within political parties.

Mr Chiu's research came a day after Australian Security and Intelligence Organisation boss Mike Burgess warned of foreign states interfering in Australian politics, with a "sleeper" agent operating in the country for years before being caught.