Elon Musk, owner of social media platform X, on Friday called Australia's centre-left government "fascists" over proposed legislation to slap fines on social media firms for failing to prevent the spread of misinformation online.

Australia's Labor government on Thursday unveiled legislation in Parliament which could fine internet platforms up to 5% of their global revenue for enabling misinformation, joining a worldwide push to rein in borderless tech giants.

The proposed law would require tech platforms to set codes of conduct to stop dangerous falsehoods spreading and be approved by a regulator. The regulator would set its own standard if a platform failed to do so and fine firms for non-compliance.

Musk, who views himself as a champion of free speech, responded to a post by an X user linking the Reuters story about the misinformation law with one word: "Fascists".

In a previous clash with the Australian government, X in April went to court to challenge a cyber regulator's order for the removal of some posts about the stabbing of a bishop in Sydney, prompting Prime Minister Anthony Albanese to call Musk an "arrogant billionaire".

Musk's latest criticism of the push against misinformation drew rebukes from government lawmakers, with Assistant Treasurer Stephen Jones calling his comment "crackpot stuff".

"This is about sovereignty, and whether it's the Australian government or any other government around the world, we assert our right to pass laws which will keep Australians safe," Jones told ABC television.

Social media platforms should not publish scam content, deepfake materials and livestream violence in the name of free speech, he said.