Taxpayers face handing political parties millions more dollars in public funding for election campaigns after a parliamentary committee recommended that a "dollar per vote" system used at last year's state poll be retained.
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The system saw the model used to fund political parties switch from them having about 75 per cent of their election costs reimbursed by taxpayers to earning up to $4 per vote in the lower house and $3 in the upper house.
It was criticised as "full public funding by stealth" as it meant parties would be able to claim more than $18 million back in public funding - should they spend that amount - while still being able to raise money via private donations.
Professor of Constitutional Law at the University of Sydney Anne Twomey also noted at the time that it meant parties would receive even more taxpayer funding over time as the population naturally grows.
The model was designed as an interim measure while an expert panel chaired by businesswoman Kerry Schott developed recommendations, following the scandal surrounding Liberal party donations rorts before the 2011 election.
The Schott panel recommended against using the model in future elections, and said NSW should revert to the model used for the 2011 election.
But the cross-party Joint Standing Committee on Electoral Matters has recommended against that advice.
In its report to Premier Mike Baird, tabled in Parliament on Thursday, it recommended that the model used for the 2015 election be retained.
The committee, chaired by Liberal MP Jai Rowell and with Labor, Nationals, Christian Democratic Party and Shooters, Fishers and Farmers members, says its recommendation follows "compelling evidence ... from a broad range of stakeholders".
It noted smaller political parties said reverting to the earlier model would see a "significant drop in their funding".
The report also cautioned the government about a Schott panel recommendation that the spending cap for third-party campaigners such as trade unions and business groups be cut in half to $500,000.
The committee urged the government to consider whether a third-party campaigner could adequately present its case within the spending limit.
Unions NSW secretary Mark Morey said: "We will be scrutinising these suggestions very closely. If any proposals arise that threaten the capacity of working people to pool their resources and express themselves politically, we will challenge them."
The government gave in-principle acceptance to all of the Schott panel's recommendations except for one - that an independent body oversee any changes to levels of public funding for elections.
Mr Baird said he would wait for the electoral matters committee's report before putting any of the reforms in train for the 2019 state election.
A spokesman for Mr Baird said: "The government will consider all recommendations in the report and respond comprehensively."
