Gillard survives grilling on graft

Julia Gillard

The royal commission into union corruption has failed to land a killer blow on Julia Gillard over her role in a union slush fund scandal despite almost four hours of questioning.

But the former prime minister admitted she would do things differently than more than 20 years ago, reflecting "none of us get to go back in a time machine".

Ms Gillard was grilled in the witness box over her conduct as a lawyer establishing the Australian Workers Union Workplace Reform Association for her then boyfriend and client Bruce Wilson in 1992.

The commission has heard Mr Wilson, at the time the AWU's WA secretary, and his offsider Ralph Blewitt, allegedly used the association to fraudulently siphon almost $400,000 from construction company Thiess.

Some of the cash was used to buy a house in Melbourne in Mr Blewitt's name for Mr Wilson to live in, with Ms Gillard preparing the power of attorney for the auction.

In her appearance yesterday, Ms Gillard rejected evidence from retired builder Athol James that he saw Mr Wilson give her wads of notes to pay for renovations to her house and Mr Wilson would pay the bills.

She said that was "completely untrue" and after checking receipts and reflecting on the work, she was satisfied she paid for all the renovations done by tradespeople with cheques from her own funds.

She also disputed former AWU employee Wayne Hem's claim to the commission that he once deposited $5000 into her bank account at Mr Wilson's request.

"I don't remember the $5000 being paid into my bank account, $5000 in those days was a lot of money," she said.

Ms Gillard revealed her annoyance that Mr Wilson arranged for her bathroom to be renovated while she was away on holiday. It prompted her to organise much more extensive work she paid for with an advance on her pay, extending her mortgage and dipping into her savings.

She maintained she was involved only in providing legal advice on establishing the association and knew nothing of its operations, how it was funded or its expenditure. She said that when she set the association up it was on the basis it would raise money for Mr Wilson's team of union officials to contest elections.

When she discussed the allegations of impropriety with Mr Wilson after they emerged in 1995, she found him "evasive" and she ended their relationship.

Ms Gillard rejected as "completely untrue" Mr Blewitt's lawyer Bob Galbally's suggestion that her relationship with Mr Wilson had "led to your judgment being clouded about matters of ethics and running files".

The commission was told on Tuesday by Ms Gillard's former boss at Slater and Gordon, now Federal Court judge Bernard Murphy, that partners at the law firm had concerns the association had been set up corruptly.

Tension over the scandal led to Ms Gillard's departure a few months later.