A High Court challenge to political donations has sparked concessions to even the playing field, as a fight brews over splitting up landmark changes to upper house voting.
The Victorian government introduced legislation to parliament on Tuesday to cap withdrawals from nominated party entities.
Labor introduced donation caps in 2018, limiting individual payments to candidates and parties to under $5000 each term.
But Labor, Liberal, and National parties were still allowed to withdraw unlimited sums from their respective fundraising bodies, known as nominated entities.
Other parties and independents could not set up their own nominated entities, with teal independent and West Party candidates challenging the constitutional validity of the laws in the High Court.
Under the government's proposed changes, smaller parties and independents would be able to set up a nominated entity.
Transfers would be capped at $500,000 for all parties and $50,000 over an election period for independent candidates.
Premier Jacinta Allan acknowledged the High Court challenge factored into her government's decision to revamp the regime.
"That matter is still going through the High Court processes and there has been no finding or determination," she told reporters on Tuesday.
She argued the legislation struck the right balance despite Labor, unlike its major party counterparts, continuing to receive fees from affiliated unions.
The donation laws had been a "major party stitch-up" from day one, the Greens said.
"It's offering a patch-up job to preserve its own advantage," the party's state leader Ellen Sandell said.
The reforms also seek to shorten the early voting period from 12 days to 10, giving the state electoral commission more time to prepare for elections.
With the next Victorian election under a year away, the Labor government has a decision to make on long-awaited upper house voting reforms.
Victoria is the only Australian jurisdiction still using group voting tickets, which allow parties to distribute upper-house preferences when people vote above the line on the ballot paper.
A Labor-chaired inquiry on Tuesday recommended a two-step process.
The first step would be to abolish the undemocratic system and use the "inclusive Gregory method" to calculate results for the November 2026 election.
But changes to the structure of the eight region upper house should be put off into the next term, with a view towards building a consensus ahead of a referendum in 2028 or 2030.
The Legalise Cannabis Party was the only party to tell the inquiry it would not support a two-step process, the report said.
But Animal Justice Party MP Georgie Purcell said doing the reforms in the wrong order would sign a "death warrant" for some legislators.
"Anything that Jacinta Allan does that isn’t abolishing the regions, along with GVTs (group voting tickets), is fundamentally terrible for democracy and will frankly make her attempts to legislate near impossible," she said.
A referendum to change Victoria’s Constitution Act has never been held.
