Prime Minister Tony Abbott has announced the terms of reference for a royal commission into union corruption.
The inquiry, headed by retired High Court judge Dyson Heydon, will look at union governance and corruption.
''This is a government which is absolutely committed to the rule of law,'' Abbott told reporters in Canberra.
The terms of reference specifically mention the Australian Workers Union, the Construction Forestry Mining and Energy Union, the Electrical Trades Union, the Health Services Union and the Transport Workers Union.
The commission can also examine any other person, association or organisation against whom credible allegations of misconduct are made.
In particular, the focus is on financial management, the adequacy of existing laws for accountability of union officers, whether any entities set up by unions have been used for unlawful purposes and whether funds of such entities have been used to further the interests of any people. It's also been asked to look into bribes and illegal behaviour.
Employment Minister Eric Abetz said union members had a right to know their fees and officials were serving their correct purpose.
As well, shareholders needed assurances that corporate funds were not being diverted to pay union officials for favours.The royal commission would look at unions and employers alike, Senator Abetz said.
''This is a sword that will cut both ways,'' he said.
Attorney-General George Brandis said a royal commission was the ''right mechanism'' to deal with allegations of widespread, systemic and ingrained wrongdoing across a range of institutions.
''This is not a question of sporadic cases, this is a matter of a widespread culture which requires the powers and the thoroughness of a royal commission,'' Senator Brandis said.
Opposition calls for a joint police task force to investigate the allegations were dismissed by the government, which said the royal commission would work with police.
''This mechanism is the most thorough going and pervasive mechanism to get to the heart of this problem, to throw a spotlight on it,'' Senator Brandis said.
KEY ASPECTS ROYAL COMMISSION WILL CONSIDER:
- Governance arrangements of ''slush funds'' set up by unions or union officers supposedly for industrial purposes or member welfare
- Whether such funds have been used illegally or to further the interests of a person or small group
- Specifically such funds set up by Australian Workers Union, Construction Forestry Mining and Energy Union, Electrical Trades Union, Health Services Union or Transport Workers Union
- Whether union members are told about such funds
- Whether union officers are accountable to members for wrongdoing with these funds
- Illegal or unprofessional conduct by union officers to advance their interests or cause detriment to someone else
- Bribes, kickbacks and other illegal payments
- Adequacy of existing laws and regulations to deal with slush funds and illegal behaviour
- Sydney Morning Herald