Unions have launched a counter-attack over claims of corruption and misconduct, as the Abbott government considers how widely to extend a new inquiry.
A former construction union official has claimed he received death threats after he tried to stop his union from dealing with a Sydney crime boss.
Brian Fitzpatrick, a former industrial officer with the Construction, Forestry, Mining and Energy Union in NSW, also alleged he had been offered $300,000 to leave the union quietly.
Prime Minister Tony Abbott said the government will make "every effort" to ensure workplaces are free of misconduct and corruption, including restoring the Australian Building and Construction Commission and holding a judicial inquiry.
He challenged Labor and the unions to show the public whose side they were on - "law-abiding citizens" or "people with a tendency to break the law".
ACTU president Ged Kearney said the Fitzpatrick matter had been referred to police, which was appropriate. And it was "absolutely absurd" for the Prime Minister to suggest a royal commission was needed because of the allegations.
"Taxpayers' money will be wasted - $100 million will be spent on what is nothing more than a political witch-hunt," she said.
Cabinet minister Christopher Pyne appeared to favour a broad-ranging inquiry, saying union corruption needed "close attention".
"If there is a royal commission, it will need to be a comprehensive one that deals with alleged corruption and malpractice in the union movement," he said.
The CFMEU's NSW construction division secretary, Brian Parker, insisted the union's legal department called the police as soon as Mr Fitzpatrick alerted them to the threats.
But the former official did not pursue the matter with police.
The man who allegedly made the threat, Darren Greenfield, denied having done so, so the union could not form a conclusion on the truth of Mr Fitzpatrick's claim, Mr Parker said.
The union did not offer Mr Fitzpatrick $300,000 but had provided a confidential exit settlement over an unrelated employment issue.
"The CFMEU does not employ gangsters or members of motorcycle gangs and our office is not infiltrated by criminals," he said.
The union has pledged to cooperate with police in any investigation.
The Coalition tried to draw the issue into the Griffith by-election campaign before Mr Abbott hit the hustings in Brisbane on Saturday.
Foreign Minister Julie Bishop said voters in Kevin Rudd's former seat should consider Labor candidate Terri Butler's background as a union organiser.
"She will have to toe the Labor Party line and that is to prevent there being a proper inquiry into illegal, corrupt activities deep within the labour movement," she said.
Ms Butler is the clear favourite to win the seat.
A spokesman for Labor leader Bill Shorten said Mr Abbott and Senator Abetz should let police get on with investigating the matter rather than play "pathetic politics". AAP