Former Liberal Party treasurer Michael Yabsley, who has raised millions of dollars to fund Liberal election campaigns, has called for a complete ban on political donations by big business, trade unions and property developers.

Yabsley told The Power Index in a video interview, “Political donations from entities across the board — companies, business associations, trade unions, etc — should be abolished, end of story”.

“The only donations that should be allowed should be from real people, Australian citizens. And those donations should be capped by legislation at a modest amount … maybe $500.”

Yabsley has urged the NSW Liberal premier, Barry O’Farrell, to “lead by example” in enacting such a ban. In an email sent to Peta Seaton, the premier’s cabinet chief, Yabsley cautioned that political scandals may otherwise force the change.

“It is an accident waiting to happen,” he warned.

“I am not contending here that there is wholesale political corruption based on the payment of money, or even that political donations provide some cheap and easy way to get a result from government,” Yabsley’s email continued. “Suffice to say there are perceptions, and occasional realities that … call into question the integrity of public policy and decision making.”

“I think it fails the smell test,” he told The Power Index more bluntly.

Yabsley, who stepped down as party treasurer after last year’s election, is arguably the most successful political fund-raiser in Australian history. In 1999, he set up the Millenium Forum, which raises millions of dollars by selling access to Liberal leaders. In 2007 he used the same model to establish the Wentworth Forum, which has raised millions of dollars for Malcolm Turnbull’s campaigns.

One of the Millenium Forum’s most successful events is its monthly boardroom lunches hosted by the big accounting firm, Deloitte, (which has contributed $909,000 to the Liberal Party since 1999). These are reserved exclusively for “sponsors” and “feature key members of the federal and state Liberal teams” such as Joe Hockey, Andrew Robb and NSW Treasurer Mike Baird.

One of the biggest sponsors of the Millenium Forum is Clubs NSW, which received special treatment in the NSW government’s recent crackdown on alcohol-related violence.

The cost of Millenium Forum sponsorship packages is not published, but the Wentworth Forum offers different levels of access to Malcolm Turnbull, depending on whether you’re a member ($5000), sponsor ($11,000), patron ($16,500), benefactor ($25,500) or governor ($55,000).

Donors to the Wentworth Forum have included Westfield billionaire Frank Lowy and property developer Harry Triguboff.

So how does Yabsley explain his sudden distaste for such donations?

“I’ve always felt somewhat queasy about the whole process,” he told The Power Index, “As I have gone through more than three decades of political funding I have always worried about the perception [of it]”.

If big donations are banned, taxpayers will have to fund the parties’ election campaigns. But Yabsley is adamant that spending should be cut back. “I actually believe that the money and the messaging involved is pretty unseemly. I think it’s out of control. We’re not selling soap powder, we’re not selling pet food. This actually goes to a fundamental question of the integrity of government.

“Whether it was the Bank NSW giving £250,000 to the Liberal Party in 1961, or a business person giving $20,000 to the Liberal Party or the National Party or the Labor Party or the Greens … let’s not pretend this is confined to one party, this is across the board.”