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Nine Morning News -

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(generated from captions) are on site at the moment. To Canberra now and Deputy Opposition Leader Julie Bishop has backed away from claims Prime Minister Julia Gillard was complicit in fraud 20 years ago. The Government, though, is calling for Ms Bishop to be sacked. We are joined by the Manager of Opposition Business, Christopher Pyne. Good morning. The Government is saying that Julie Bishop should be sacked. Should she go?The Government is trying to create a distraction from the panic that they are feeling over the issue of the AWU's scandal, the slush fund that is engulfing the Prime Minister. Let me just state very, very clearly what this is about. We are asking the Prime Minister did she take part in the establishment of a fund which was a criminal conspiracy to defraud, and did benefit from that fraudulent activity? They are jailable offences. We have asked her many questions which she has reviewed to answer over the last two days. The most important question was whether she wrote to the WA Corporate Affairs Commission to attest to the legitimacy of the fund. She knew at the time it was a slush fund - she admitted it herself. But she refused to answer that question. Now, if she didn't write the letter, why doesn't she just say no. Yesterday, though, Julie Bishop was asked about the extent of her communication with Ralph Blewitt, the man who has led many negotiations. This is what she said. Have you spoken with Mr Ralph Blewitt yesterday, your staffers? Yes, I've spoken to Ralph Blewitt. How many times and when?Months. REPORTER: Was it in person or over the phone?No, it was in person. Last Friday.She said it was a chance meeting. Now, Ralph Blewitt says he spoke with Julie Bishop on the phone earlier in the week. Has she been caught out here?No, she has not. She said herself that she spoke to a person who did not identify themselves as Ralph Blewitt and she didn't know that he was Ralph Blewitt at the time. There is no contradiction. Julie Bishop has nothing to worry about at all. But honestly, I mean, I would welcome any former dodgy union official coming forward and making a clean breast of their past misdeeds to get to the bottom of the murky scandal about union corruption, sleaze and slush funds engulfing the government. It is not just the Australian Workers Union but the Health Services Union. If any former dodgy union officials want to contact Julie Bishop, I'm sure she will take the calls. We want to know how widespread the rancid behaviour has been.On another matter affecting the Government, particularly the Prime Minister, Julia Gillard was overruled yesterday over her plans on a vote over Palestine. Is that a big enough blow for the Prime Minister to be risking her job?It is a big deal. When the Prime Minister makes the wrong call on something like the supertrawler, the Caucus backs her. Shen she makes the right call on something like Israel, the Caucus rolls her. It goes directly to her authority, when she cannot get the cabinet to agree to one of her very important priorities, apparently, and shatters the bipartisanship which has existed over the support between the state of Israel between Labor and Liberal going back to 1948. It is a very big deal. Labor are doing it, of course, because they are terrified of the electoral consequences in western Sydney of taking a principled position over the state of Israel.I want to ask you about this quickly - a Tweet from Labor MP Steve Gbbons who said, "Libs are led by a gutless douche bag and both the PM and deputy should be sacked." What do you think of that comment, particularly calling Julie Bishop a bimbo.It is unacceptable. The Prime Minister has another test for her leadership today. She said wherever she found sexism, she would call it for what it was and deal it with. Well, in her own Caucus, there's a member of parliament calling our Deputy Leader a "narcissistic bimbo". The prime minister needs to discipline Steve Gibbons and make it clear she doesn't share the views. If she doesn't, it is just like everything else Julia Gillard says - all spin, no substance.