Prime Minister Malcolm Turnbull and senior Coalition ministers have launched an all-out assault on under-pressure Labor senator Sam Dastyari, questioning his integrity over Chinese donations and seeking to make the issue a test of Bill Shorten's leadership and judgment.
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And while Labor MPs insist the government has seized on the revelations about Senator Dastyari to distract from the government's own woes, they admit that if further revelations emerge, the Manager of Opposition Business in the Senate may have to stand aside.
One Labor MP said that Mr Shorten, a leading figure in the Victorian Right, would "cut Sam loose [as manager of opposition business] if he wanted to . . . but it's not there yet", while noting the leader's need for the ongoing support of Senator Dastyari's NSW Right faction.
"I wouldn't rule it out if this keeps going, but I don't see it at this stage".
As the issue dominated political discussion on Monday, Liberal MP Craig Kelly suggested reforms to foreign donations rules were needed.
" I like the idea that if you don't have a vote in the Parliament, a vote in the election, you don't actually get a chance to donate," he said.
At the same time, more footage emerged of Senator Dastyari defending China - and attacking Foreign Minister Julie Bishop after she vowed Australia would stand up to China to defend peace, liberal values and the rule of law back in July 2014.
Senator Dastyari criticised Ms Bishop, who spoke in the same week Japanese Prime Minister Shinzo Abe visited Australia and just months after China had unilaterally declared an Air Defence Information Zone, for "taking sides and getting ourselves involved in territorial disputes, ongoing territorial disputes between China and their neighbours".
"Australia's largest trading partner is China, China's trade with Australia is double the size of our second-largest trading partner, which is Japan...we should not be taking sides between China and its neighbours…I think there will be trade and economic consequences [for Ms Bishop' s comments]."
Senator Dastyari's comments came after he was gifted two bottles of Grange Hermitage in late 2013 by a big Chinese donor, the Yuhu group, but before the group picked up the tab for legal fees he incurred while general secretary of the NSW ALP in March 2015.
The Labor powerbroker is under siege after Fairfax Media revealed he had a Chinese government-linked donor pay a $1600 debt and that he had adopted a pro-China stance on the South China Sea dispute that was at odds with that of the Labor Party.
Speaking at the G20 summit in Hangzhou, Mr Turnbull said areas of electoral reform, including campaign finance, would be considered in the normal way by the parliamentary joint standing committee on electoral matters.
"But the real question today is this," he said. "I'm here in China, standing up for Australia.
"Back home, Bill Shorten is standing up for Sam Dastyari's right to take cash from a company associated with a foreign government and then express a view on foreign policy that undermines the Australian government's foreign policy, which had been supported by Mr Shorten himself.
"Mr Shorten has to decide whether he has to continue standing up for Mr Dastyari's cash for comment."
Acting Prime Minister Barnaby Joyce said Mr Shorten must "show real leadership" and explain the situation to the Australian people or force Senator Dastyari to resign, while Treasurer Scott Morrison labelled the under-pressure senator "Shanghai Sam".
The government has focused its attack on whether there is a relationship between the gifts and donations to Senator Dastyari and his expressed opinions on China's claims in the contested South China Sea and whether it amounts to "cash for comment".
And Mr Joyce argued Mr Dastyari should be held to a higher standard because his donation was received as a cash payment, rather than as free travel or gifts in kind.
"This was cash. It was cash. It was cold, hard cash," he told ABC radio on Monday evening. "And therefore the reason for asking questions is so much more exemplified, because he has received cash and at the same time he has given an entirely different position [on the South China Sea]."
Mr Shorten described Mr Pyne's challenges to him as "hyperventilating" and said he had already expressed his "unhappiness" to Senator Dastyari.
"I've just said to him that he shouldn't have done it and he said he won't do it again," the Opposition Leader said.
One Labor MP said Senator Dastyari's links to Chinese donors were a "very bad look, it's that part of the NSW Right that doesn't believe in anything".
But another defended the embattled Senator, declaring there was "nothing new emerging and the government have no agenda, so they are ramping it up".
- with Michael Koziol
