One of the most generous retirement perks for federal MPs has become a "relic of a bygone era" as the federal government tries to rebuild voter trust after Sussan Ley's expenses scandal.
Legislation to immediately axe the life gold travel pass for politicians cleared parliament on Thursday night, despite the objections of veteran coalition senator Ian Macdonald.
"The life gold pass for parliamentarians is a relic of a bygone era," Special Minister of State Scott Ryan said.
"Australians rightly expect parliamentarians and former parliamentarians to spend money efficiently, effectively and ethically."
The new laws mean free travel will be limited to former prime ministers.
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New laws to establish an expenses watchdog to hold federal politicians to account over how they spend taxpayer money also cleared parliament.
The watchdog will audit and report on parliamentary work expenses as well as provide advice, monitor and administer claims for travel expenses and allowances by parliamentarians and their staff.
The Senate sat late into the night to debate the legislation, with Senator Macdonald voting against the government on the gold pass axing and attempting to move several amendments.
He objected to the retrospective nature of the change, insisting "elderly retired" politicians should not be stripped of an entitlement they were promised in the past.
Prime Minister Malcolm Turnbull announced the changes in January amid public outrage following revelations senior ministers were using taxpayer funds to attend parties and sporting events.
The expenses scandal claimed the scalp of former health minister Ms Ley after it was revealed she bought an investment property on a taxpayer-funded trip.
WATCH: Liberal senator 'distressed' by gold pass axe
