Melbourne radio host Neil Mitchell took exception to the idea on his breakfast show on Monday after WAR published a guide for "how to act in solidarity" that included instructions to "bring cash and cards on the day to pay the rent".
"How do we know where they'll use the money?" Mitchell asked. "You don't freely go out and collect money without being accountable … I hand over $20, what happens to it?"
Speaking with Lidia Thorpe, the former Greens MP and first Aboriginal woman in Victoria's Parliament, Mitchell asked, "Is it really about money?"
"Look, it's about reparations," she said.
"If we look at South Africa, Neil, they've got 100 million in their fund. Canada: $600 million. New Zealand: $1.5 billion.
"Australia has not paid any reparations at all and because we don't have a treaty, this is a way where ordinary Australians can contribute."
She said the money will go "where Aboriginal people will determine … that looks like addressing mass incarceration of Aboriginal children is going up".
The ethics of Australia's national day being on January 26 — the same day the First Fleet arrived at Sydney Cove in 1788 — is contested every year.
Sydney University newspaper Honi Soit published an editorial on Monday outlining its first position against Australia Day.
"'Australia Day', year upon year, furnishes us with a state-sanctioned narrative at odds with thousands of years of Aboriginal land management and spiritual connection to land," the newspaper's editors wrote.
"We do not call for a change of date, but rather an abolition of any day of national celebration until over 230 years of ongoing injustice are addressed and remedied."
Polling conducted by Dynata and commissioned by the Institute of Public Affairs this week claimed more than 70 per cent of 1000 Australians surveyed do not want Australia Day moved to another day.