Charities are concerned the move is aimed to undermine attempts to advocate on political issues during election campaigns.
Australian Conservation Foundation chief executive Kelly O’Shanassy described the measure as a “real blow for democracy” with their charity expected to be captured by the new threshold.
“We are seeing charities treated the same as political parties – we are not trying to run for political office – it will stifle advocacy for a better Australia,” she told SBS News.
The laws officially passed the lower house on Thursday, after Labor had negotiated amendments that raised the disclosure threshold from the initial proposed figure of $100,000.
Another amendment had changed the rules to describe organisations governed by the laws as “significant third parties,” instead of political campaigners.
The move had responded to concerns from charities their status could become under threat because of their advocacy.
“This is a dirty deal that is bad for democracy,” he told parliament.
“We are [being] urged to rush through a bill that will silence charities and string them up with red tape.”
Independent MP Zali Steggall added that the reforms would keep charities from raising awareness through their advocacy work, describing the measure as “undemocratic”.
But Labor’s Treasury spokesperson Jim Chalmers defended the opposition’s decision to support the proposal.
“We always try and strike the right balance to be constructive. We have been the chief defenders of charities in this building,” he told reporters.
In a statement, Special Minister of State Ben Morton said the reforms would provide the Australian Electoral Commission (AEC) the legislative tools they need to require further disclosure and transparency from entities seeking to influence elections.
“For too long independents and political activist groups have been able to hide dark money without being held to the same standard as political parties,” he said.
“Activist groups have been funnelling money into campaigns to influence elections. It is time the Australian people finally know what they’ve been up to.“
Australian Council of Social Services CEO Cassandra Goldie said charities were “deeply concerned” the legislation would prevent them from advocating for “much-needed changes.”
“Everyone across the country benefits when charities are able to advocate for systemic policy reform,” she said.