Prime Minister Tony Abbott has promised to shine a ''great big spotlight'' on union corruption and accused Opposition Leader Bill Shorten of protecting his allies in the trade union movement, rather than taking the side of honest workers.
Federal cabinet is expected to rubber stamp the terms of reference for a wide-ranging royal commission into union slush funds, malfeasance and the behaviour of corrupt officials on Monday.
The move to call the judicial inquiry comes as Parliament prepares to sit on Tuesday and as the government steps up public pressure on Labor and the Greens to pass laws in the Senate to re-establish the Australian Building and Construction Commission.
On Sunday, Mr Shorten and Australian Council of Trade Unions president Ged Kearney attacked the imminent royal commission as a witch-hunt and a political stunt and called for police agencies to take the lead in investigating allegations of corruption and malfeasance in the construction union, revealed by Fairfax Media two weeks ago.
Meanwhile, a preliminary report on allegations of union corruption at Barangaroo has concluded the claims are confined to a single labour hire company, NSW Premier Barry O'Farrell has revealed.
Mr O'Farrell ordered a ''full report'' from the state government's Barangaroo Delivery Authority after it was reported a company controlled by crime figure George Alex had been supplying contract labour to the building site.
On Sunday, Mr O'Farrell said he had received ''a preliminary report that is essentially in line with what I've said before, which is that to the best of [the authority's] knowledge it involves one out of 100 contractors''.
He said he would consider whether to make the report public.
Mr Abbott said the Coalition had moved to broaden the inquiry beyond its commitment for a judicial inquiry into the AWU slush fund scandal because ''since then [there] have been very credible allegations, including from senior officials in the union movement, of widespread corruption, standover tactics, even organised crime penetration''.
''We are on the side of the honest worker, we are on the side of the honest unionist. The question is whose side is Bill Shorten on?'' he said on Sky News.
''Bill Shorten is a former union official himself and as things stand, it looks like Bill Shorten wants to run a protection racket for a protection racket.''
''As we have seen with other serious problems, serious criminal law enforcement problems, sometimes you need to shine a big spotlight, a great big spotlight into the dark corners of our national life. It is only then that the great big spotlight has been shone in that we can see the law enforcement agencies doing their job properly.''
It's understood the royal commission will be led by former High Court judge John Dyson Heydon and that the expected cost of the inquiry has not been finalised.
The inquiry will examine allegations centring on the Construction, Forestry, Mining and Energy Union, the Health Services Union scandal linked to former Labor MP Craig Thomson and former ALP president Michael Williamson, and the Australian Workers Union ''slush fund'' affair from the 1990s, but will have the freedom to range beyond this brief.
Mr Shorten proposed a taskforce led by the Australian Federal Police and including state police forces to investigate the allegations.
The Opposition Leader said his party had no tolerance for bribery, extortion or criminal behaviour.
''No one is welcome in the labour movement if they are engaging in any form of criminal behaviour,'' he said. "Labor is asking the government to set up a police-led taskforce to deal with these issues. We believe a $100 million-plus royal commission is a political stunt that doesn't do anything to assist with law and order. This is a job for police, not politicians.
''This nation does not have time to waste, or taxpayer dollars to waste, with the government pursuing political stunts, when in fact we've got police forces, the Australian Crime Commission, who already have those powers.''
with Josh Gordon