Among the 29 signatories to an open letter coordinated by the Australia Institute are former politicians Dr John Hewson, Cheryl Kernot and Michael Beahan and ex-judges Anthony Whealy, Paul Stein and David Harper.

Polling by the Australia Institute shows nine in 10 Australians support laws which uphold freedom of speech while ensuring the information in them is not deceptive or misleading.

"Given the drift in recent decades, truth in political advertising and indeed, a cap on electoral advertising spending, are now an imperative to save our democracy," former Liberal leader Dr Hewson said.

Australian consumer law requires truth in trade and commerce, but there are no such rules for communication during election campaigns.

Penalties could include fines, forced retractions or loss of public funding for anyone engaging in misleading or deceptive conduct.

The Australia Institute will present its case at a public hearing of the joint standing committee on electoral matters in Canberra on Wednesday morning.

Australian Associated Press