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Foreign donations to political parties, associated entities and third parties should be banned, a parliamentary committee has recommended, with a view to potentially banning foreign donations for any group or person engaging in political activity.

The Joint Standing Committee on Electoral Matters' second report arising from examining the issues of the 2016 federal election has -- as expected -- recommended that Australian political parties, their associated entities and third parties be banned from accepting donation from foreign citizens and entities. This excludes dual Australian citizens, expats living overseas, and non-citizen permanent residents, but the committee says a new inquiry will need to be held to figure out how to prevent foreign funds being channeled through organisations and people engaging in political activity who do not fit into the above categories.