Christopher Pyne says Wentworth MP’s work as a GP could also disqualify her from sitting in parliament

The Coalition government has threatened to retaliate against independent MP Kerryn Phelps and two Labor MPs if parliament decides to refer the home affairs minister Peter Dutton to the high court to test his eligibility to sit in parliament.

The leader in the house, Christopher Pyne, made the threat on Wednesday morning, arguing the government was confident Dutton was eligible but if parliament disagreed the Coalition would “definitely” move to refer Phelps, Mike Freelander and Tony Zappia.

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The extraordinary escalation of hostilities came as the defection of Julia Banks to the crossbench raised Labor’s hopes that it could win a majority for a motion to refer Dutton, although independent Cathy McGowan was reassessing her intention to support it.

Phelps labelled the threat “dirty tactics” and warned she would “not be intimidated” but has not yet decided her vote on whether to refer Dutton to test if payments to childcare centres owned by his family trust breach the constitution.

The solicitor general has advised that Dutton was “not incapable” of sitting in parliament due to section 44(v) of the constitution, which bans an indirect pecuniary interest in an agreement with the commonwealth, but warned there was still “some risk” the high court might find he had a conflict of interest.

Pyne said he was not threatening the three MPs but confirmed the government would “definitely” move to refer them if Dutton were sent to the high court.

“We have very firm legal advice that Peter Dutton doesn’t have a constitutional issue under section 44,” Pyne told Radio National.

“But if he does, if the parliament decides that he does and he should go to the high court, well that’s the same problem that Mike Freelander has, that Kerryn Phelps has and that Tony Zappia has so it would behove the parliament if they vote to send Peter Dutton to the high court that those three MPs would also have to be sent to the high court.”

Media reports have questioned the eligibility of the trio of MPs under the same section – Phelps and Freelander because of their occupation as GPs and because Phelps is a city of Sydney councillor and Zappia because of questions about his interest in his wife’s fitness centre.

“My original position, of course, is that we don’t have a constitutional issue but if they decide that he does and they want to send him there, they’ll have to send the other three as well,” Pyne said.

Phelps, who met both attorney general Christian Porter and his shadow Mark Dreyfus on Tuesday to discuss the issue, said there was “no question” it was “obviously a threat” to refer herself and two other MPs. “I won’t be intimidated,” she told reporters in Canberra on Wednesday.

“I think it is outrageous that there is a conflation of Peter Dutton’s situation, with childcare centres, and Medicare rebates for patients,” she said.

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“It’s well established that Medicare rebates are a statutory benefit to a patient, if I hadn’t assured myself about that before I stood for election I would not have nominated.”

Phelps said it was a “very important decision” about whether to refer Dutton, noting that the validity of his decisions as immigration and home affairs minister could hinge on his eligibility to sit in parliament.

“I’ve been very carefully considering the evidence … so I’ve been looking at a range of legal advice on this and I’ll make my decision when it comes to parliament.”

The Centre Alliance MP Rebekha Sharkie told ABC AM it was “pretty disappointing” the government was threatening retaliation on section 44 and that Dutton had a “case to answer” because the solicitor general’s advice was “a little unclear”.

“The government could really take the lead on this, they could refer Peter Dutton,” she said. “I don’t think the government wants to be seen to be running a protection racket for Peter Dutton, which is what they’re sort of alluding to.”

Sharkie said if Dutton was eligible the high court would say so and it would be the “best outcome” for the parliament to have a resolution.

Sharkie, who voted for the referral before Malcolm Turnbull lost the leadership, said she would “wait and see” if it came up in a motion again.