By political reporters Latika Bourke and Louise Yaxley
Video: Arthur Sinodinos offers no comment to pursuing media pack (ABC News)
Photo: Arthur Sinodinos stepped down from the frontbench yesterday. (AAP: Daniel Munoz)
Related Story: Sinodinos stands aside as Assistant Treasurer over ICAC investigation
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Related Story: Labor steps up pressure on Arthur Sinodinos over NSW corruption probe
Arthur Sinodinos will forgo his ministerial office and pay while he stands aside during a corruption inquiry.
Coalition figures insist the senator has not been stood down from the ministry, but has voluntarily stepped aside from the assistant treasurer's job.
Labor pursued Senator Sinodinos in Question Time today, asking Prime Minister Tony Abbott what entitlements the senator would receive now he is on the backbench.
Opposition Leader Bill Shorten said the Prime Minister would pay if it emerged he knew more about Senator Sinodinos's dealings as a director of Australian Water Holdings (AWH)– a company linked to disgraced Labor figure Eddie Obeid.
"What did you know and when did you know it?" Mr Shorten asked.
Mr Abbott defended his former minister, describing him as a "brave man" who will return to the frontbench "soon."
But Labor says the Prime Minister's comments pre-empt the Independent Commission Against Corruption (ICAC) and that the "dysfunction" around Senator Sinodinos will not help preparations for the May budget.
"Arthur, for the good of the Government, made the decision to step aside," the Prime Minister told reporters in Canberra this morning.
"I know Arthur Sinodinos very well; he is a fundamentally decent man and I'm confident that he will be able to return to his ministerial duties soon.
"But in the meantime he has done the right and honourable thing."
Asked whether the Senator "jumped or was pushed" into making the decision, Mr Abbott praised his colleague.
"I think Arthur did the absolute right thing. He is a good man, he is a brave man, and he is a friend and colleague of whom I am proud."
Senator Sinodinos has been called to appear as a witness at an ICAC inquiry into Australian Water Holdings (AWH), a company he was involved with before entering Parliament.
He insists he has done nothing wrong and on Tuesday told Parliament he would be "vindicated" once the inquiry is completed.
After initially refusing to step down, Senator Sinodinos yesterday agreed to Labor demands that he give up his frontbench position while the ICAC carries out its work.
Senator Sinodinos says he is looking forward to assisting the ICAC and told reporters today he would be making "no further comment" on the issue.
"Let's talk to the commission," he said several times.
"It's a good day to get on with other things."
Sinodinos decision 'not the least bit damaging'
The Government says losing its Assistant Treasurer seven weeks out from its first budget is not a damaging blow but an example of integrity.
"I don't think it's in the least bit damaging for the Government," Cabinet Minister Christopher Pyne told reporters at Parliament House earlier.
He said Labor had protected former MP Craig Thomson for years, even after serious investigations into his misuse of union funds began.
Mr Pyne said Senator Sinodinos's actions showed the Government was focused on its economic agenda and that he believed the decision was made by the senator himself and not the Prime Minister's office.
"I'm quite certain that Arthur made the decision himself on the basis that he wanted to not be a distraction," he said.
"I look forward to his return to the ministry, hopefully, when he's exonerated by the ICAC."
Labor says the Government is pre-empting the corruption investigation by predicting Senator Sinodinos's return to the frontbench.
Shadow treasurer Chris Bowen says the assistant treasurer's work in forming the budget is traditionally complex and critical.
"So this dysfunction, which is being caused by the standing aside of Senator Sinodinos, will certainly not help budget preparations, which I understand [are] already behind the eight-ball," Mr Bowen said in Canberra.
'Not unusual' for Sinodinos to be unaware of donations
Senator Sinodinos's decision to stand aside left Labor without an explanation it had been demanding for revelations that he stood to gain up to $20 million from his involvement with AWH, which has links to the disgraced Labor powerbroker Eddie Obeid.
Senator Sinodinos says the ICAC is the appropriate forum for providing answers, not Parliament.
But Labor is still asking how Senator Sinodinos could have not known about donations from AWH to the New South Wales Liberals that have since been repaid, given he was chairman of the company and an office bearer of the Liberal Party.
Video: Josh Frydenberg has full confidence Arthur Sinodinos will be vindicated. (ABC News)
He stands by last year's statement to the Senate that he did not recollect donations to political parties being discussed at the board level of AWH.
Finance Minister Mathias Cormann says it is not unreasonable that Senator Sinodinos would not have known about a donation to the Liberal Party.
"Obviously these are the sorts of things that will be assessed during a proper process, but the point here is it is not unusual for senior office bearers not to be aware of every single transaction that happens," he told AM this morning.
"We're not prejudging anything but what I would point out again is that Arthur Sinodinos has not been accused of anything."
Mr Cormann says the issue surrounding Senator Sinodinos is not the same as the problems that plagued NSW Labor.
"I mean this is unlike a whole series of Labor figures in New South Wales who are standing accused and who have been found to have acted corruptly," he said.
He says Labor is pursuing Senator Sinodinos for political reasons.
"Labor, clearly for obvious political reasons, are pursuing a particular strategy but that doesn't take away the fact that Arthur Sinodinos is a very decent man and we're confident that he'll be vindicated and that he'll return to his position in the ministry," he said.
