Roundup: Aussie PM's re-election campaign under pressure amid financial scandal

Australian Prime Minister Malcolm Turnbull's re-election campaign hasn't had the best of starts as the financial scandal surrounding New South Wales state branch of his ruling Liberal Party widens further.

Turnbull has taken the political gamble in calling for an early, double dissolution election where every seat in both the House of Representatives and the Senate are contested on July 2 provided the Senate does not pass his controversial bill to reinstate the Australian Building and Construction Commission (ABCC). The bill has already been rejected by the upper house.

However, the challenge of capitalising on his popularity over the rival Labor Party has become harder after Fairfax Media on Tuesday reported Liberal Party rising star and minister for cities Angus Taylor become the second minister in a week to become tangled in the financial scandal involving alleged illegal donations the NSW state branch.

Turnbull has consistently led opinion polls against Labor leader Bill Shorten since coming to power in a party-room coup in September 2015. However, that popularity is fading.

The New South Wales state Electoral Commission is refusing to pay the political party more than 4.4 million Australian dollars (3.32 million U.S. dollars) until it reveals the details of secret donors who gave 700,000 Australian dollars (528,621 U.S. dollars) to the party's Free Enterprise Foundation. Australian elections are publicly funded.

It is alleged the foundation was used by senior party figures to disguise donations from prohibited donors including property developers who have been banned from making political donations to NSW state campaigns.

Taylor was a member of the finance committee when he discussed using the controversial Free Enterprise Foundation to channel prohibited donations, Fairfax Media reported.

"Every discussion I ever had always worked on the assumption that donations would be disclosed and compliant," Taylor said in a statement following the allegations, dismissing the report.

However, Turnbull has faced calls to sack federal Cabinet Secretary Arthur Sinodinos who was the branch's financial director and treasurer during the time of the alleged illegal donations, which would make him the fourth in as many months to be replaced in the scandal plagued ruling party.

Turnbull on Tuesday continued to throw his support behind Sinodinos, insisting he has provided a detailed response to the matter raised by the electoral commission.

"Arthur Sinodinos is a very important member of the cabinet," Turnbull told reporters in Sydney.

Sinodinos says the commission has used "loose language which could convey erroneous impressions" and has sought a retraction of parts of its summary of facts.

"I have never been accused of corruption," Sinodinos said in a statement at the weekend.

"I deny any wrongdoing or illegality."

The Labor party on Tuesday called for Turnbull to stand down both ministers unless they respond to the allegations candidly.

Australia's lawmakers are set to return to parliament for a three-week sitting from April 18 after being recalled by Governor-General Peter Cosgrove on Turnbull's advice in an effort to pass the legislation.

If the legislation to reinstate the ABCC isn't passed, it will become the trigger for the double-dissolution election on July 2. For a sitting government to spill both houses, a government bill must be rejected twice.

The key cross-benchers of the federal senate said they would pass the legislation if the bill is broadened to encompass concerns about corruption in other sectors other than the construction industry which is heavily aligned to the opposition Labor Party. Endit