The Opposition Leader will use the resumption of federal parliament to turn the fight over the alleged fraud at the Australian Workers Union into a wider challenge to the Prime Minister and her Labor colleagues over ethics and standards.
Bracing for four days of brutal tactics to end the parliamentary year, the government is planning to limit Ms Gillard's answers when she faces close questioning of her past, in the belief she can tough out the claims against her.
Cabinet ministers launched a co-ordinated defence of the Prime Minister yesterday after her ex-boyfriend, former AWU official Bruce Wilson, declared that Ms Gillard knew "absolutely, categorically nothing" about the alleged fraud in the early 1990s.
But the ministers stopped short of urging Mr Wilson to make a statement to police or co-operate with authorities in a way that would reveal the workings of the AWU Workplace Reform Association, to which Ms Gillard provided legal advice to help set up when she was a lawyer at Slater & Gordon acting for the AWU.
While Mr Wilson's intervention buoyed the government, some caucus members privately questioned his reliability given his responsibility for the scandal.
Ms Gillard has repeatedly denied wrongdoing, saying she had no knowledge of the operations of the association, which she later described as a "slush fund" for the re-election of union officials.
Deputy Opposition Leader Julie Bishop is expected to lead the scrutiny of Ms Gillard this week, with a focus on her professional conduct as a lawyer in the years before she left Slater & Gordon after an internal investigation into the matter in late 1995. "It reflects on her professional and ethical standards and her honesty and integrity today as she answers questions on that conduct," Ms Bishop told The Australian.
"It also goes to her attitude towards union corruption and the misappropriation of union funds."
Seeking to force a debate over union standards and personal ethics, Mr Abbott will move to suspend standing orders in federal parliament today to introduce a private member's bill that would toughen standards for union leaders.
While company directors face criminal charges if they misuse corporate funds, there is no similar sanction against union leaders, leaving a gap that Mr Abbott's draft legislation would seek to close. Union officials who misused member funds would be liable to fines of up to $220,000 and up to five years in jail if found to have used their position dishonestly and recklessly to create an advantage for themselves, according to a draft plan.
Mr Abbott will cite the AWU affair and the alleged misuse of funds at the Health Services Union, which has led to civil action against suspended Labor MP Craig Thomson.
The bill is being presented as a reform to governance and personal standards rather than a major industrial relations change as the Coalition seeks to avoid charges that it wants to dismantle the Fair Work Act.
Mr Abbott said last week he would act "responsibly, carefully, cautiously" to address problems in the Fair Work Act but would not "break faith" with working people. However, he vowed to enact reforms in the first term of a Coalition government to hold union officials to higher standards.
"We don't want union officials to be able to get away with ripping off their members almost scot-free, which is what we have sadly seen in this country," he said in a speech in Perth last week.
Mr Abbott's move could fail at the first hurdle because his suspension of standing orders would need an absolute majority of 76 votes to succeed in the lower house, but his tactic ensures a debate over standards.
Labor strategists acknowledged that independent MPs were likely to support any move to air a debate over the AWU, given that some - including Andrew Wilkie - had signalled they wanted to hear the Prime Minister's explanations about her past.
Senior Labor figures dismissed the need for the Prime Minister to call a press conference to answer questions over the matter and said a relentless campaign by Ms Bishop in parliament this week would only backfire on the Coalition. "People will know it's a smear campaign and they'll judge Julie Bishop very harshly for it," the source said.
Mr Wilson, the former union leader alleged to have misused hundreds of thousands of dollars in the early 1990s, told News Limited newspapers the questions about Ms Gillard's past were a "waste of time". He said Ms Gillard knew nothing about the fraud and that any "witch-hunt" against her would turn up nothing to do her any harm. He also cast doubt on the credibility of his alleged partner in the fraud, union bagman Ralph Blewitt.
Foreign Minister Bob Carr yesterday dismissed the questions to Ms Gillard as a "right-wing indulgence", while Environment Minister Tony Burke said Mr Wilson's comments showed "the door has slammed pretty firmly shut" on the matter.
Attorney-General Nicola Roxon told the Ten Network: "I just don't think there is an issue to answer here, and I don't think the Liberal Party really want to because they just want it to keep running for as long as possible."
Asked by The Australian if Mr Wilson should make a statement to the authorities on the matter, Mr Burke said through a spokeswoman he had nothing to add, while a spokeswoman for Ms Roxon said it was a matter for police and that she did not respond to hypothetical questions.
Mr Blewitt, who last week made a statement to Victorian police about his involvement in the fraud, said last night Mr Wilson could not be taken seriously in his public statements as long as he failed to go the police and refused to waive legal privilege.
He said Mr Wilson's former lawyers, Slater & Gordon, might be able to shed more light on the union fraud scandal if Mr Wilson agreed to allow the release of his legal files. "If he is serious about this he will arrange for the release of the material that is most relevant," Mr Blewitt said. "His public comments are ambiguous and farcical."
Former Labor senator John Black called yesterday for a royal commission into the AWU affair but caucus members were divided on how Ms Gillard should handle the matter.
Caucus members noted Mr Wilson was not a reliable witness because of his role and some said the Prime Minister needed to offer a longer explanation about her link to the slush fund. Others said Mr Wilson's comments eased the pressure on Ms Gillard to answer the opposition questions.
"Why should she dance to the tune of Julie Bishop?" one asked.
Tony Abbott to pick fight on ethics
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