Labor has been challenged to back a proposed law before the next election that would end pork barrelling.
Independent MP Helen Haines introduced a bill to federal parliament which would increase transparency for Commonwealth grants to ensure they aren't used for political purposes.
Under the private member's bill, all federal grants would need to have publicly available selection criteria and be merit-based.
There would be extra reporting to parliament about the selection criteria of a grant program.
Ministers who have gone against departmental advice about the awarding of a grant would need to explain to parliament about why the funding has been allocated.
Federal ministers would also need to make updates on whether the mandates for grant programs are being complied with.
Dr Haines said the government needed to prove it was strong on integrity issues.
"I'm laying down the gauntlet to this government today ... it's not a radical bill, it's a clear bill that shines a light onto where grants are distributed," she told reporters in Canberra on Monday.
"We have a government that talked a big game on integrity, and indeed delivered when it came to landmark reform on a National Anti-Corruption Commission, but there is so much more to be done in Australia when it comes to restoring trust in out democracy."
The bill would pave the way for a parliamentary committee to oversee the grant administration and investment mandates.
Dr Haines said it would lead to greater accountability for major grant projects,
"We know that pork barrelling can start as maladministration and get all the way to corruption," she said.
Independent senator David Pocock said he would also seek to introduce the bill through the upper house as an amendment to government legislation.
He said the bill brought forward by Dr Haines was similar to one that was introduced to parliament by Labor when it was in opposition.
"When it comes to granting, pork barrelling, what the major parties are doing is out of line," he said.
"Australians want taxpayer money spent where it needs to go, not where the government of the day wants to go for political purposes."
