Government powers to deregister charities for protesting or engaging in forms of political activism have been struck down in the Senate.
Independent senator Rex Patrick's disallowance motion passed with support of Labor, the Greens and the cross bench.
Anglicare Australia had feared it could be targeted if its board, staff or volunteers join protests or if the charities commissioner thought it was "more likely than not" the group would fall foul of expanded government standards.
Senator Patrick said the powers had a "chilling effect" on charities.
"It is obvious this is intended to silence public discourse and action on political matters," he told the Senate.
Labor senator Deborah O'Neill said the legislation was government overreach and likened it to dictatorial laws in Europe, saying charities would be deregistered if an employee or volunteer engaged in trespassing.
Senator O'Neill said some of Australia's biggest progressions, including same sex marriage and the National Disability Insurance Scheme, were the result of charities campaigning.
Concerns were also raised about freedom of political expression and freedom of association.
Nationals senator and cabinet minister Bridget McKenzie defended the laws,saying it only impacted charities who were protesting unlawfully or used their resources to enable others to act unlawfully.