The protection for politicians to say anything they like in parliament should never be used as a weapon and that's why the House of Representatives should apologise for "egregious falsehoods" made by disgraced former Labor MP Craig Thomson.
MPs also will be asked to apologise to members of the Health Services Union for Thomson's decision to spend $267,721.65 on his election campaign in 2007 and for his fraudulent use of union funds.
Mr Pyne said parliamentary privilege should only be used "in defence of our constituents and because we are trying to do good in this place".
"It should never be a weapon to be wielded to attack opponents who can't fight back," he told parliament on Tuesday.
"The former member for Dobell used parliamentary privilege to defame individual members of this House and also individuals outside the parliament and to mislead the parliament with a fantastic story that he then did not repeat in court when he had the opportunity to stand by it."
Thomson was convicted of fraud charges by the Melbourne Magistrates Court last week.
He is awaiting sentence on multiple theft and fraud convictions including using a union credit card to pay for prostitutes.
The government successfully referred Thomson to parliament's privileges committee on Monday, saying there was a prima facie case that he had misled parliament during the speech in which he protested his innocence and advanced alternative theories.
Mr Pyne moved the highly unusual motion for the House apology after question time on Tuesday.
Labor will support the motion but Mr Pyne wants Opposition Leader Bill Shorten to go further.
"I assume that he will announce today that he is going to pay back the $267,000 that the former member for Dobell stole from Health Services Union members," he said.
"It is the very least that the Leader of the Opposition can do."
He also demanded Mr Shorten apologise for the ALP spending $350,000 to help cover Thomson's legal bills.
Earlier, Mr Shorten said Thomson's actions were a betrayal of what Labor stood for.
"We do think that what Craig Thomson's done is a disgrace," he told reporters.
"It's a betrayal of his members, it's a betrayal of unionists everywhere and it is conduct which puts him beyond the pale."
