Government seeks to turn the tables on Labor, which has called a snap inquiry into donations to the NSW Liberals

The government will demand Bill Shorten appear before a Senate inquiry into political donations to answer questions about a $40,000 donation he failed to declare for eight years before revealing it in evidence to the royal commission into trade unions.



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The Senate cannot compel members of the lower house to appear before its committees, but in a move designed to turn the tables on a new committee that it has dubbed a Labor “stunt”, the government will argue the Labor leader has relevant questions to answer.

As revealed by Guardian Australia, Labor used the special sittings of parliament this week to set up a snap Senate committee to investigate the oversight of associated entities, like the federal Liberal party’s Free Enterprise Foundation, which the New South Wales electoral commission says was used to “wash” property developer donations illegal in that state, at a time when cabinet secretary and senator Arthur Sinodinos was the NSW party’s finance director.

The Senate has “directed” Sinodinos to “appear before the inquiry to answer questions”. In evidence before Icac, and in public statements, Sinodinos has said he did not know about the banned donations.

The royal commission did not make any adverse findings against Shorten. In evidence to the commission he revealed he had failed to declare a political donation of about $40,000 from a labour hire company that he received for the 2007 election campaign. The labour hire company, Unibuilt, had donated money through the AWU that was used to pay $40,000 of the $52,000 salary of Shorten’s campaign director Lance Wilson in February 2007. He declared the donation only a few days before he gave evidence to the royal commission last year when it came to his attention.

The donation came at a time when the AWU was negotiating an enterprise agreement with Unibuilt. Shorten said he didn’t believe Unibuilt was seeking something in return for the donation.

In its findings the royal commission said there was no evidence Shorten had promised anything in return for the payments, but that it was evident the donor “hoped for a return on the monies he spent on ... the wages”.

The deputy chair of the Senate finance and public administration references committee, Cory Bernardi, said “there are unanswered questions about the $40,000 and other support from the AWU that Bill Shorten solicited for his campaign and didn’t disclose for eight years, which the royal commission did not press, partly because of statute of limitations.

“Since the AWU is an associated entity, Labor’s Senate inquiry should also be prepared to examine these issues.”

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The government opposed the setting up of the inquiry, which it has labelled a “stunt”.

“That is unprecedented and a violation of a very fundamental parliamentary principle,” said the leader of the government in the Senate, George Brandis.

The leader of the opposition in the senate Penny Wong insisted the inquiry was justified, because Sinodinos was a cabinet minister.

“This is a man who is a cabinet minister … I don’t see how that is muck-raking. I think that is about making sure our electoral system is robust,” she told the ABC.

The committee has three Labor members, two Coalition members and one Green.