New legislation could see federal politicians face salary deductions of up to 5 per cent for severe violations of workplace rules.

The government is moving to crackdown on behaviour including bullying, harassment, discrimination, and sexual assault. 

Details of a proposed bill have been prematurely disclosed by newspapers in recent days, but Finance Minister Katy Gallagher has acknowledged the effort is real, even though the proposal is still undergoing final adjustments.

This legislative effort seeks to establish a new standards body within Parliament, named the Independent Parliamentary Standards Commission (IPSC), tasked with investigating incidents and enforcing codes of conduct for MPs and their staff. 

The move follows the adoption of new codes of conduct aimed at curbing inappropriate behaviour among parliamentarians.

According to leaked documents, the cross-party working group is allegedly contemplating a variety of penalties for MPs found in violation of these rules, ranging from reprimands and mandated professional development to fines pegged between 2 to 5 per cent of their annual salary. 

For an ordinary backbench MP, a 5 per cent fine could amount to more than $10,000.

The IPSC would also have the authority to recommend further disciplinary actions, including the removal of MPs from committee positions or their suspension from Parliament. However, only Parliament itself can enact such measures.

Gallagher says that while the disclosure of the draft bill's details is unfortunate, the government is committed to refining the proposal based on feedback. 

This includes deliberation over the appropriateness of a 5 per cent fine and the public disclosure of substantiated complaints.

The proposal would require approval from both houses of Parliament, and so has been drafted in consultation with independents, the Greens, and the opposition, Gallagher says. 

The government reportedly aims to have the IPSC operational by October this year.