Labor leader Bill Shorten has accused Malcolm Turnbull of showing weakness by continuing to support Family First senator Bob Day despite the collapse of his housing group Home Australia.
Mr Shorten says the senator's position is "untenable" while he is preoccupied with helping creditors, as his company owes almost $38 million.
"This is a morally weak prime minister. A morally bankrupt prime minister relying upon an insolvent senator," Mr Shorten said in an address to the Queensland ALP state conference on the Gold Coast on Saturday.
"Although Bob Day himself has declared his position untenable, has left a trail of unpaid subcontractors and distressed families without completed homes behind him, the Liberals are willing to keep him in the Senate for just long enough to secure one more vote in their attack on unions."
Greens leader Richard Di Natale called on the government to encourage Senator Day's resignation.
"Think about those many families who are hurting right now, who invested their life savings because they wanted to follow the great Australia dream of buying a house, and who have had that ripped away from them," Senator Di Natale said in Melbourne on Saturday.
