Marketing of unhealthy foods would be prohibited from 6am to 9.30pm on TV and radio broadcasts, while ads on social media and online sites would be banned outright, under a bill introduced to parliament on Monday by independent MP Sophie Scamps.
"Our children are being preyed upon every time they turn on the TV, listen to the radio, or go online, by companies that seek to profit at the expense of our children's health," Dr Scamps told parliament.
Obesity is estimated to cost the health system $11.8 billion every year, with a quarter of children already overweight or obese.
The former general practitioner and athlete argued current restrictions were not strong enough and children were exposed to more than 800 junk food ads on TV alone every year.
"If we continue to stand by while children are deluged by junk food advertising on social media and on TV, then we are failing them," she said.
The MP noted the "particularly insidious" online environment where algorithms individually target children and the lure of influencers spruiking unhealthy foods for money.
The ban would include all businesses that sell unhealthy food, not just the big food and beverage giants, but the MP said they would still be able to advertise healthy options on their menus.
Broadcasters, service providers and food companies could face hefty fines if they fail to adhere to the proposed guidelines.
Print or outdoor advertisements, sports sponsorships, and content shared by food and beverage companies on their own channels would not be impacted.
Dr Scamps said her bill was about starting a national conversation on child obesity.
The bill was backed by fellow independent MP Monique Ryan in parliament and has the support of a host of health and medical associations.
As a former pediatrician, Dr Ryan said children's minds were more susceptible to the persuasion tactics and can't tell the difference between ads and facts in junk food marketing.
"What we are allowing those advertisers to do is to harm our children," Dr Ryan said.
Public health nutritionist Rosemary Stanton, who has campaigned for a junk food ad ban for decades, welcomed the move.
"We really need to change and the thing we need to change is we need to tell advertisers that our children are not fair game," Dr Stanton said.
Regulating unhealthy food marketing was a critical first step on the road to safeguarding children's futures against "predatory targeted marketing", Food for Health Alliance executive manager Jane Martin said.
Dr Scamps said she was heartened by conversations with the government and believed there was a good appetite for change on the issue.
Assistant Treasurer Stephen Jones maintained there remained a role for advertising and promoting brands whether it was junk food or other sorts of food.
About 40 countries have or are planning to regulate junk food advertising including the UK, South Korea, Norway and Chile.
