The coalition has seized on a new report by the NSW anti-corruption body as evidence federal Labor needs time out from government to clean up its act.
The NSW Independent Commission Against Corruption (ICAC) on Friday found that former NSW Labor government mines minister Ian Macdonald corruptly granted Doyles Creek Mining consent to apply for a coal exploration licence.
It found the grants were "substantially for the purpose of benefiting" the company's chairman, John Maitland, a mining union boss and "mate" of Mr Macdonald.
Two federal Labor members, former industry minister Greg Combet and parliamentary secretary Senator Doug Cameron, gave evidence at the inquiry.
No findings were made against them.
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However the coalition on Friday launched a new television advertisement weaving a thread between Prime Minister Kevin Rudd, former NSW premier and now Foreign Minister Bob Carr, Deputy Prime Minister and NSW Labor powerbroker Anthony Albanese, newly appointed senator and former NSW Labor secretary Sam Dastyari and Mr Macdonald.
"Labor still stinks," the ad concludes.
Alleged corruption in the NSW ALP is damaging the government's prospects of retaining key marginal seats at the September 7 election.
Mr Rudd told reporters in Perth on Friday he supported ICAC's work.
"That is why I commissioned federal intervention into the NSW branch of the Australian Labor Party," he said.
The prime minister said the intervention had led to "fundamental rule changes" to stamp out corruption in the branch.
Mr Rudd hit back at the Liberal party, accusing the candidate for McMahon, former police officer Ray King, of taking a political donation from disgraced former police detective Roger Rogerson.
"What is the truth here and what are the standards being applied to Mr Abbott?" Mr Rudd said.
Mr King says Labor is engaged in "reputation assassination".
NSW Labor leader John Robertson said the findings would affect the federal campaign.
"But these people are smart enough to distinguish between state issues and federal issues and I'm sure that they will be able to distinguish between the two Saturday week," he said.
The ICAC report tabled in the NSW parliament on Friday said Senator Cameron, who was the national secretary of the Australian Manufacturing Workers Union, had observed Mr Macdonald and Mr Maitland were "good mates".
The report said Mr Combet, who is retiring at the September 7 election, had written a letter of support for Mr Maitland's project to Mr Macdonald in September 2008.
Mr Combet told the inquiry Mr Maitland had spoken with him about a "training mine" in the Hunter Valley.
But he said there had been no discussion about the detail of the project, and the end product was "completely different from what he had been told by Mr Maitland".
Senator Doug Cameron told AAP on Friday there was never any prospect of findings being made against him.
He said ICAC had made it clear he was there to help the inquiry and was not a person of interest.
"They in fact thanked me for the evidence and help and said I was an impressive witness," he said.
Senator Cameron said Mr Combet also was not a person of interest in the inquiry.
