The Law Commission has recommended that all publicly funded agencies should be subject to official information requests, including courts, universities and boards of trustees.
The commission has made more than 100 recommendations in "The Public's Right to Know", a review of the Official Information Act (OIA) which was tabled at Parliament yesterday.
Lead commissioner for the report Prof John Burrows said main principles of the 30-year-old Act were sound, but it needed to be upgraded for the digital age.
The review included asking which bodies should be subject to official information requests.
He recommended legislation should capture any agency, institution or government-related office run with public money.
"We think there's a case now for saying if a body is receiving public funding and is performing a public function it should be accountable under the OIA," he said.
This meant state schools, universities and courts would be accountable to the rules of the Act.
If the recommendation was adopted, the public would be able to request information on how a political party spent its taxpayer money, because Parliamentary Services would fall under the new rules.
Prof Burrows said it was difficult to know which agencies were accountable to official information legislation, and a public register should be created.
The Law Commission said several major changes in the past three decades had prompted the need for a legislation change.
The internet era had made it possible to release vast amounts of information, the public were increasingly demanding more information from central and local government, and the State was more involved in commercial operations.
Prof Burrows said the commission was recommending that government agencies became more proactive in releasing information.
This saved the public the need to ask for information, reduced the hassle of responding to individual requests, and ensured more people had access to it.
"In the modern age, this is surely the way to go and should be encouraged," Prof Burrows said.
The commission called for a new oversight body which looked after policy, development, and performance reviews.
At present, the Ombudsman was in charge of investigating complaints under the Act, but did not have any wider responsibilities.
"Currently, the OIA has no champion," Prof Burrows said.
An information commissioner could be created, who would perform a similar role to the Privacy Commissioner or Human Rights Commissioner.
The commission acknowledged that there might not be an appetite for a new government agency in a tough economic climate.
The review also recommended re-drafting some of the grounds for withholding information - such as "good government" and "commercial sensitivity" - which were unclear.
It would also adjust the grounds for refusing requests which imposed too great a workload on agencies.
Prof Burrows said the commission had been told of OIA requests which had taken 300 hours, or seven weeks, to process.
The Justice Ministry and Department of Internal Affairs would consider the recommendations, and were expected to act on them within six months.