A debate over electoral funding laws descended into a shouting match across the Senate floor on Wednesday evening, as independent senator Lidia Thorpe was repeatedly told to withdraw comments which she later argued was a "policing of speech and censorship".

On Wednesday, the majority of crossbenchers took a unified stand against Labor striking an eleventh-hour deal with the Coalition to water down its election funding bill without sending it to an inquiry.

It will see the maximum amount any one donor can give to a candidate or a political party put at $50,000, as opposed to the $20,000 Labor had originally proposed.

It prompted a withering response from independents, with Kate Chaney arguing it was "both the major parties working together to prevent future competition".

"We don't let Coles and Woolies make the laws about supermarket competition, but Liberal and Labor are getting together to decide who can compete against them," the member for Curtin said.

Speaking in the Senate to debate the bill, Senator Thorpe said the "so-called electoral reforms" were a "stitch up," by the major parties to preserve their balance of power.

"Labor went to the last election promising electoral reforms, giving voters the impression that the days of corporate influence over our political system would be over, that the battlers and everyday people would be better represented," she said.

"You lied."

After being asked to withdraw the "unparliamentary" remark, which she replaced with "dishonest," the Victorian senator described Liberal and Labor MPs as gammin - meaning "inauthentic" or "fake" - resulting in Senate President Sue Lines requesting the remarks once again be withdrawn.

What followed was a shouting match between the Senate President and the Gunnai, Gunditjmara and Djab Wurrung Senator, resulting in Senator Lines threatening to remove the call, and the broadcast microphone for Senator Thorpe being temporarily silenced.

At one point Senator Thorpe replaced the slang by stating: "This G government… blip blip blip…can't even figure out how to make sure children are fed."

When asked to withdraw another comment - this time arguing the two major parties were maintaining the "white supremacy of the colony" - Senator Thorpe stated sarcastically: "Fine, I will be a good little Black fella like those in your party."

She was also asked to withdraw comments labelling Senator Pauline Hanson a "convicted racist".

Senator Hanson was found guilty of the civil offence of breaching the racial discrimination act last year, but was not technically "convicted".

In a statement to National Indigenous Times late on Wednesday evening, Senator Thorpe said it was "particularly indefensible" that she was asked to withdraw the term gammin, inquiring if only "King's English" could be spoken in parliament.

"White supremacy is about the very real presence of systemic racism and white privilege, but we are not allowed to use this phrase in the Senate," she said.

"My comments were not directed at any particular senators or individuals; they were intended to highlight systemic barriers in our current electoral system and low representation of minority groups in parliament."

She argued that while discussions of racism and race may make people uncomfortable, it was a "real problem" the country needed to face.

"It's racist in itself to prevent these issues from being raised in the chamber, or forcing senators to withdraw," Senator Thorpe said.

"Let me be clear: this is racism in the senate and the white supremacy of this institution in action."

On the bill itself, which was expected to pass the Senate on Wednesday night before being rubber stamped in the House of Representatives on Thursday morning, Senator Thorpe argued politics needed "more First Peoples and more people of colour".

"But this bill is all about preventing that and keeping the major parties, which are dominated and led by white men, in control," she said.

Other changes expected to pass would allow peak bodies, including the Australian Council of Trade Unions and Business Council of Australia, to set aside up to $200,000 - four times the new donation cap - from members, or affiliated unions, to fund campaigns, starting at the 2028 federal election.

It was labelled a "stitch up" by the independents, who were also highly critical of an increase in the public funding per vote from $3.35 to $5.

Dai Le, who ran a grassroots campaign in Western Sydney, a traditional Labor heartland, to defeat Labor candidate Kristina Keneally in 2022, told reporters the new laws would make it harder for multicultural voices to be heard.

"[For] somebody in a multicultural community out in South West and Western Sydney in particular, who's going to try and run as an independent at an upcoming federal election. It is going to be hard for them,' she said.

"It definitely will prevent anybody from actually giving it a go."