The federal government is weeks away from unveiling its proposal to limit election spending, with a focus on large individual donors likely to provoke teal independents and trigger a legal challenge from mining billionaire Clive Palmer.

Don Farrell, the minister responsible for electoral matters, used a speech at the left-wing McKell Institute on Tuesday to confirm his electoral reform bill, to be introduced to parliament by the end of the year, will seek to limit both candidate spending and the size of individual donations.

Senator Farrell said this would end the “full-blown arms race” of political spending and stop billionaires from “seeking to make our elections their playground”.

While the contours of the government’s bill had already been telegraphed, the speech is the first time Senator Farrell has spoken about it publicly after it was twice delayed, initially slated for an August release.

The minister said the government needed the extra time to “consult, draft, negotiate, and seek support across the aisle”.

The government is anxious to make its bill “lawsuit-proof” ahead of a near-certain legal challenge from Mr Palmer, who regularly donates millions to his political party.

Senator Farrell made light of Mr Palmer’s threats in his remarks, remarking, “If Clive Palmer is against it, I must be on the right track.”

But the bill will be armoured against a challenge by setting the individual donation cap at a high level, as the ABC reported in March, on the assumption that the High Court would be less likely to see such a cap as breaching the Constitution’s implied right to free political communication.

Independent MP Kate Chaney made a similar proposal in her private member’s bill, which would stop any individual, business or organisation from donating more than 2 per cent of all money given to all candidates and parties.

The government’s bill will also require any donation above $1,000 to be disclosed within “days,” an idea supported by the bulk of the crossbench.

“Limiting the amount that can be received from any individual donor will stop the billionaires that seek to influence our elections, while not preventing genuine political involvement,” Senator Farrell said.

Farrell eyes off teals with expenditure caps

But the other half of the government’s “dual cap” system, which would limit how much political campaigns can spend, is an explicit provocation of teal independents, several of whom spent millions on their campaigns and see their ability to collect donations from individuals and fundraising groups as their only avenue to challenge major party dominance.

Senator Farrell rebuked the teals’ funding model in his speech, criticising “those who consider themselves progressives [for] throwing their billions” behind teals “while not realising they are participants in the problem.

“Genuine reform means that we do not draw a distinction between conservative dollars and progressive dollars.”

The government has not confirmed whether it plans to cap expenditure by candidate only – which independents say would benefit parties running national campaigns – or whether there will also be national party caps.

But Senator Farrell observed with concern there were “some federal contests, including in NSW, [where] individual candidates have spent over three million dollars over the course of a few weeks,” without identifying specific campaigns.

“Most concerningly, these contests are often fuelled not by a groundswell of their engaged constituents, but by large, single and often anonymous donors.”

Greens and crossbenchers have previously accused the government of planning a “political stitch-up” to structure electoral reforms to benefit the major parties at the expense of minor parties.

Senator Farrell said he wanted a “consensus” approach “across the political divide, with every major and minor party, with each independent and candidate, to fix this problem”.

But the prospects of parliamentary consensus appear slim with the Coalition poles apart with crossbenchers on most elements of the reform.

When the joint standing committee on electoral matters considered these reform questions, Coalition politicians on the committee were ambivalent about the prospect of caps, saying only that they should be designed to capture Labor’s union-based fundraising and the funding model of teal independents.

While that suggests some prospect for bipartisanship, the Coalition committee members were resolutely opposed to another component of electoral reform the government has committed to – laws to enforce truth standards for political ads.

The government has publicly stated its bill will include a proposal for truth standards, expected to be similar to a model pioneered in South Australia, but it has emphasised that donation reforms are its main focus and Senator Farrell’s speech did not mention truth in advertising.