Commissioner Dyson Heydon wrote to Attorney-General George Brandis on October 2 saying the commission's reporting date of December 31 had created an "atmosphere of considerable urgency".

He outlined difficulties the commission had faced in meeting its deadline, but said: "This letter is neither an application to widen the terms of reference nor an application to extend the reporting date."

Opposition employment spokesman Brendan O'Connor said the government had extended the royal commission to ensure its report would be released in an election year.

"This is a base political exercise spending tens of millions of taxpayers' dollars," he said. "It serves the political interests of the government and is now contrary to the requests sought by the royal commissioner himself."

Australian Council of Trade Unions assistant secretary Tim Lyons said the extension was based on the government's election timetable.

"Prime Minister [Tony] Abbott and Attorney-General [George] Brandis have made a decision that will see the royal commission run into the election timetables of Victoria, Queensland and NSW as well as the next federal election despite the royal commissioner saying this is unnecessary," he said.

When Mr Brandis announced on Tuesday the royal commission would be extended until the end of 2015, he said it was "not about politics".

"It is very plain that the problem of criminality and the associations between certain unions, and certain union officials, and crime is a much more widespread problem than appeared to be the case when at the beginning of this year the government decided to establish the royal commission," Senator Brandis said.

"It is very apparent from what Mr Heydon says in his letter that there is a large amount of unfinished business before the royal commission which from a practical point of view would not be able to be considered satisfactorily were the original reporting date adhered to."

Unions NSW secretary Mark Lennon urged Premier Mike Baird to reject the extension.

"George Brandis has presented Mr Baird with an excellent opportunity to distinguish his government from the ideological warriors in Canberra," Mr Lennon said.

"The royal commission requires the permission of individual states if it is to extend its power into that state's jurisdiction. All Mr Baird has to do is say no."

A spokesman for Mr Baird said the timing of the royal commission "is a matter for the federal government".

"The NSW government supports the work of the royal commission and will agree to any request put to it by the federal government," the spokesman said.

The royal commission will release an interim report by December 31.

Senator Brandis said the extension was expected to cost an extra $8 million. He said the royal commission had underspent its current budget by more than $15 million.