The Turnbull government has vowed to fight an election on union reform if the Senate blocks contentious laws cracking down on widespread union misconduct, following a damning royal commission report.
Prime Minister Malcolm Turnbull described Commissioner Dyson Heydon's report into union corruption as a "watershed" moment for Labor and its leader, Bill Shorten, to reform a union movement that had become concerned with self-interest rather than its members.
"This is not a case of a few rotten apples spoiling the whole barrel," Mr Turnbull told reporters in Sydney.
"It's a battle between workers and union bosses and Mr Shorten's got to decide whose side he's on."
The report released on Wednesday makes 79 recommendations for reform and 93 referrals to authorities for further investigation, including possible corruption charges against Victorian Labor MP Cesar Melhem during his time as secretary of the Victorian branch of the Australian Workers' Union.
The government will reintroduce laws previously rejected by the Senate to re-establish the Australian Building and Construction Commission in the first week of 2016 and wants it passed before the end of March.
It will also reintroduce a stronger version of laws rejected by the Senate to set up a registered organisations commission, as recommended by Mr Heydon.
"We are willing to fight an election on this," Mr Turnbull said.
"We need the support of the parliament but if the parliament does not provide that support then obviously we will appeal, as we should in a democracy, to the people."
Employment Minister Michaelia Cash said crossbenchers who previously rejected the laws had indicated they were awaiting the commission's final report and she was confident the overwhelming evidence would get them on board.
The government also sought to cast fresh doubt over Mr Shorten's conduct during his time as a union boss, after the commissioner referred the Australian Workers' Union to Victorian prosecutors over possible corruption and false accounting charges during the time Mr Shorten was at its helm.
That's despite the royal commission making no adverse findings against Mr Shorten.
"The extent of Mr Shorten's involvement is a matter which remains obscure," Attorney-General George Brandis said.
He said the significant amount of 48 referrals for further criminal investigation warranted a one-year extension of Taskforce Heracles, the federal and state police taskforce attached to the royal commission.
The 45 potential breaches of civil law identified by the commission would be investigated by a new working group comprised of 11 departments and agencies including the Australian Crime Commission and the corporate and consumer watchdogs.
Labor and the unions dismissed the report as a political witch-hunt, denying Mr Heydon's finding that union misconduct was widespread and "deep-seated".
Opposition workplace spokesman Brendan O'Connor said criminal activity should be met with the full force of the law, something that would have happened sooner if money spent on the royal commission was instead handed to police.
"The motive of the government was political, not dealing with criminal matters," he said.
"This is not a court of law. The Commission is an executive inquiry established by the government to act on behalf of the government."
The government will announce its detailed response to the report next year.
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