Ms Chesters criticised the government’s motives in setting up the Commission, labelling it a “cynical attack on their own political opponents”.

She said any wrong-doing or illegal activity should be investigated by the police, in conjunction with Fairwork Australia.

“It is frustrating that there’s so much focus by this government on trying to bring down their opponents and union-affiliated members,” she said.

“It’s a political exercise. It’s money that could be better spent elsewhere.”

Ms Chesters, a former representative of the United Voice union, said a Royal Commission was the wrong outlet to investigate corruption and would not have the powers to lead to convictions.

“Where there is a case of corruption – and they’re rare cases – let the police do their jobs,” she said.

Prime Minister Tony Abbott said the Commission would work with the police to pursue cases of intimidation, corruption and stand-over tactics.

“There is no reason why a Royal Commission cannot run concurrently with police investigations and indeed prosecutions,” he said.

“One of the problems that we've got here is that the police traditionally have tended to stand back from industrial matters.”

Mr Abbott said the broad-reaching commission would fulfill the government’s election promise to look into union slush funds.

He said it would extend to the Australian Workers Union, Construction Forestry Mining and Energy Union, Electrical Trades Union, Health Services Union and the Transport Workers Union.

“This Royal Commission is designed to shine a great big spotlight into the dark corners of our community to ensure that honest workers and honest businesses get a fair go,” he said.

The opposition has suggested the Commission could cost up to $100million.

Ms Chesters said that was an exorbitant amount that would better to spend on supporting jobs.

"What would you prefer it spent on? An assistance package for SPC, assistance for creating jobs in our region, or an inquiry into union officials?"

A 2003 Cole Royal Commission into the Building and Construction Industry cost tens of millions of dollars. 

It resulted in the establishment of the Australian Building and Construction Commission, which was later disbanded by the Labor government.