A Senate committee will inquire into associated entities of political parties, such as the Liberal’s Free Enterprise Foundation, after Labor won Greens and crossbench support.
The Senate also directed cabinet minister Arthur Sinodinos to give evidence to the committee, despite strenuous objections from the attorney general George Brandis that the move was unprecedented.
The Labor leader in the Senate, Penny Wong, successfully moved a motion on Tuesday afternoon to refer the oversight of associated entities to the finance and public administration references committee.
A motion for the same committee to consider the outcomes of the most recent Council of Australian Governments meeting, including schools and hospitals funding and taxation was also successful.
The motions come after the New South Wales Electoral Commission ruled the NSW Liberals had failed to declare the source of funds donated to the Free Enterprise Foundation, which were then channelled to the party, in breach of state electoral laws.
The findings have drawn scrutiny from Labor, which has raised Sinodinos’s role as the state party’s finance director and treasurer at the time.
The Senate committee inquiries are both highly embarrassing to the government, and would not have eventuated if not for Malcolm Turnbull’s decision to recall parliament for extra sittings to consider reinstating a tougher building industry regulator.
The Senate has also brought forward Senate estimates hearings to 5 and 6 May, after the budget on 3 May.
The estimates hearings may further complicate the government’s plans to pass the budget then announce a double dissolution before 11 May because they will reduce the amount of time to consider the budget bills.
The finance and public administration committee will consider the funding and disclosure regime relating to annual returns, and the powers of the Australian Electoral Commission with respect to supervision of associated entities of political parties.
It would report by 4 May, just one day after the federal budget and shortly before the official election campaign begins for a 2 July election.
Spokesmen for the Greens and senators Ricky Muir and Jacqui Lambie told Guardian Australia they supported the motion.
Senator Nick Xenophon said he supported increased oversight of associated entities but asked the Senate to separately consider the direction to Sinodinos to give evidence to the committee.
He said the committee should be formed and invite Sinodinos to appear but it was “premature to target” particular individuals in the motion to set up the inquiry.
Brandis told the Senate it was unprecedented and a violation of a basic principle for the Senate to direct a person to appear before a committee. He said it would be shocking if the government had used a parliamentary majority to direct the opposition leader or shadow minister to give evidence.
The motion to inquire into associated entities passed on the voices and the motion to compel Sinodinos to attend passed 33 to 30.
Wong probed donation disclosure in Senate question time, asking whether the prime minister, Malcolm Turnbull, was aware of evidence before the Independent Commission Against Corruption (Icac) relating to Sinodinos before he elevated him to cabinet and why he had not stood him aside.
The attorney general, George Brandis, said there had been no findings against Sinodinos. He said the fact Wong could not detail a finding against Sinodinos was “the clearest proof that question shouldn’t have been asked and [Wong] should be ashamed of it”.
“The prime minister most certainly was satisfied in every respect that [Sinodinos] satisfied the requirements of the ministerial code of conduct and that he is a person of integrity, as we all know him to be.”
In evidence before the Icac, and in public statements, Sinodinos has said he did not know about banned donations from developers.
Senate motions in the recalled parliament have the potential to embarrass Labor, too. Senators Xenophon, Lambie, John Madigan and Glenn Lazarus plan to bring a motion calling for the government to mandate the use of Australian steel in all public procurement, a step Labor was unwilling to take when it unveiled its steel policy last week.
