A royal commission into trade union corruption will provide protection for witnesses wanting to expose wrongdoing, building and construction firms say.

But the trade union movement warns the Abbott government-initiated inquiry is designed to damage the reputation of unions in the eyes of the community.

Master Builders Australia says a culture of intimidation and fear exists in their industry.

A royal commission would allow people to give evidence without being bullied by unions, unlike police investigations.

“It is the fear of the payback,” CEO Wilhelm Harnisch told Sky News, adding many building firms risked paying liquidated damages if there were delays to projects.

The Construction, Forestry, Mining and Energy Union, one of the nominated targets of the commission, believes it can get through any investigation.

“The overwhelming majority of trade unionists, both members and officers of the union, are honest and hard-working people,” national secretary David Noonan told ABC Television.

The Australian Mines and Metals Association, which represents the majority of resource industry employers, believes a restored Australian Building and Construction Commission would have a more immediate impact in stamping out bribery, coercion and criminality from the construction sector.

But it still welcomes a royal commission, saying it offers an opportunity to lift the veil on lawless and criminal conduct going back decades.

“Not only can it compel unions, employers and individuals to appear and give evidence, but it can get past the shield of legal professional privilege,” chief executive Steve Knott said.