Labor has called on the federal government to ensure officials and ministers do not deal with former minister Christopher Pyne in his new defence industry role.
But the Liberals insist the gig is not an issue.
Mr Pyne, the former defence minister, has landed a job with professional services giant EY on defence matters.
The hire comes as EY builds its defence expertise ahead of the federal government spending $200 billion on its military leading up to 2026.
"Right now the Australian government is engaged in the largest expansion of our military capability in our peacetime history ... an ambition to build Australian science, technology, engineering, innovation and industrial capability," EY defence industry leader Mark Stewart said on Wednesday.
"Christopher Pyne is also here to help lead conversations about what all states need to do to meet the challenges and opportunities this defence investment will bring."
Labor frontbencher Penny Wong said the role is a "clear breach" of ministerial standards.
The standards state: "Ministers are required to undertake that, for an 18 month period after ceasing to be a minister, they will not lobby, advocate or have business meetings with members of the government, parliament, public service or defence force on any matters on which they have had official dealings as minister in their last 18 months in office.
"Ministers are also required to undertake that, on leaving office, they will not take personal advantage of information to which they have had access as a minister, where that information is not generally available to the public."
Senator Wong says there is no doubt Mr Pyne will be tapping into inside knowledge he gained as a minister.
"This is a breach of the prime minister's standards and the prime minister has to act," she told reporters in Adelaide.
Asked what steps Scott Morrison should take, Senator Wong said that's up to him.
"You should ask him that but it's a question of whether these standards are worth anything.
"This is about ethical government. We are a democracy that expects accountability of ministers to the parliament."
Fellow Labor frontbencher Stephen Jones earlier said Mr Morrison should make it clear to all ministers and departments not to deal with Mr Pyne while he is in breach of the standards code.
"There should be a healthy break between your ministerial life and jumping into the private sector and working directly in an area you were once a decision maker on," he told Sky News.
But Liberal MP Jason Falinski said Mr Pyne was not undermining the standards.
"The intent is that he would not trade in confidential information ... there's no way he would do that," he told Sky News.
"Unless Stephen Jones or Labor has some information that that's his intention, then I really think they apologise to him actually."
