The politician at the centre of a donations scandal is backing a government move to tighten the rules on financial support for local government candidates.
ACT leader John Banks was embroiled in a row over donations from Kim Dotcom and Sky City for his failed Auckland mayoral campaign in 2010.
Dotcom gave him $50,000 and the casino $15,000 but they were described as anonymous in the election return prepared by an ACT Party worker.
Police said in July there was insufficient evidence to lay charges under local government election laws.
Local Government Minister David Carter says the proposed changes to the Local Electoral Act will help address public concern about transparency and accountability around donations.
The size of anonymous donations will be limited to $1500, disclosure obligations will be increased and candidates will face fines for failing to obey the rules.
"They will bring the Act more into line with the Electoral Act which governs the conduct of parliamentary elections and, in doing so, will help build trust in the local electoral system," Mr Carter said.
Mr Banks says the move will help clarify the confusion around the current law.
"No candidate for public office should have to go through what I have been through. These changes are well overdue," he said.
But Labour leader David Shearer derided the move, saying National had rejected a member's bill which had sought to revamp the law and had not stood down Mr Banks from his ministerial portfolios during the police investigation.
"It's absolutely hypocritical. John Key staunchly defended John Banks. He said he'd done nothing wrong. If that was the case, why is he now promoting a law change to stop the exact kind of behaviour John Banks indulged in when he was running for local government?" Mr Shearer said.
The amendments will be combined with the Local Electoral Amendment Bill currently before parliament and the changes are expected to be in place by May next year.