Portrait of Environment Minister Tony Burke, during his visit to Aurukun, on Monday 5 November 2012.
Photo: Alex Ellinghausen

Environment Minister Tony Burke Photo: Alex Ellinghausen

Environment Minister Tony Burke describes allegations before the corruption inquiry into former NSW Labor MPs as ''horrific'' but he has brushed off concerns that the inquiry is doing damage to the federal brand.

Mr Burke told the National Press Club in Canberra on Thursday that there was no connection between the Independent Commission Against Corruption inquiry currently underway in Sydney, and federal Labor or federal NSW MPs.

''The allegations are horrific, they are extraordinarily serious,'' Mr Burke said. ''[But] it couldn't be further away from the federal party.''

ICAC is currently examining whether former state mining minister Ian Macdonald provided inside information to Labor powerbroker Eddie Obeid and his family regarding the granting of coal exploration licences in 2009.

The inquiry has heard that this enabled the Obeids to make $30 million and the family was set to make a further $70 million.

Earlier this week, Fairfax reported internal Labor polling that showed the party would be wiped out in western Sydney due to a combination of factors, including problems with the Labor ''brand'', exacerbated by the  ICAC inquiry. Other factors reported by the polling included lack of trust, the cost of living and asylum seekers.

Mr Burke - who holds the western Sydney seat of Watson - said there was no concern about the damage the inquiry might be doing to Labor's federal chances.

''Am I at all concerned that people would view that as being associated with the federal party? No I'm not. I'm just not concerned about it being a federal issue.''

Mr Burke also said that NSW - currently led by the Barry O'Farrell's Coalition government - had a ''great propensity'' to vote differently at federal and state levels. He added that as a NSW taxpayer he was horrified at what was being reported out of the ICAC inquiry.

''Even to see it being alleged is horrific. But ... I just can't for the life of me see a federal connection''.

In Senate question time today, Liberal senator Mitch Fifield asked Foreign Minister and former NSW premier Bob Carr if he thought it was appropriate to serve "as the face of Australia to the world" while there was a corruption investigation into ministers of his former government.

Senator Fifield also asked if it whether the Foreign Minister should stand aside until ICAC work was concluded.

"We've just witnessed a man drowning!" Senator Carr said in response to the question, noting that he had not been called before the inquiry.

He said that over the ten years of his government there was no allegation of corruption.

"There wasn't even from the state coalition ... day after day of question time, a single allegation," he said.   

A spokesman for Senator Carr added that ICAC was looking at allegations made after Senator Carr retired as premier in 2005.

"This is a flailing attempt at guilt by association," he said.

With Phillip Coorey, Kate McClymont