Federal Labor minister Jason Clare wants the book thrown at any former ALP members who behaved corruptly while in government.
The Independent Commission Against Corruption (ICAC) will on Wednesday hand down reports into disgraced former members of the previous NSW government, including Labor powerbroker Eddie Obeid.
Mr Clare, who holds the western Sydney seat of Blaxland, said the consequences were straightforward.
"If what has been alleged has been proven to be true, then the book should be thrown at these people and they should be prosecuted to the full extent of the law," he told Sky News on Wednesday.
Labor was taking steps to reform the party, including changes made to the way the federal leader was chosen, he said.
Cleaning up NSW Labor is seen as crucial to Prime Minister Kevin Rudd's chances at the upcoming federal poll.
The government needs to hold on to a host of western Sydney seats to retain power.
On July 4, Mr Rudd gave NSW ALP secretary Sam Dastyari 30 days to report on cleaning up the branch, and sought changes including the expulsion of any member found to be corrupt or engaging in improper conduct.
Trade Minister Richard Marles said he was disgusted by the ICAC allegations.
"There is no room in the Labor party for activity of this kind or people who undertake this activity," he told Sky News.
But Liberal MP Jamie Briggs said the Rudd "intervention" was all for show, as many of the key powerbrokers pulling the strings within the ALP were still in senior positions.
He said many of those who helped Mr Rudd return to the Labor leadership had strong ties with the ALP secretariat and had since been promoted by the prime minister.
"Kevin Rudd is not interested in fixing it," he told Sky News.
"He's interested in putting a new coat of paint on what is a crumbling, rotten core of the Labor party in NSW."
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