Sam Dastyari forced to quit amid widening scandal

Labor’s leading crusader against banks and big business has been forced to resign from the frontbench.

Sam Dastyari announces his resignation from Labor’s frontbench in Sydney yesterday. Picture: John Fotiadis

Labor’s moral authority has ­suffered a blow, with its leading crusader against banks and big business forced to resign from Bill Shorten’s frontbench for accepting money from Chinese ­companies.

NSW senator and party powerbroker Sam Dastyari said he ­offered his resignation to end a damaging “distraction” for the ­opposition, amid ongoing reve­lations about his links to Chinese-backed donors and comments on the South China Sea dispute that were at odds with Australia’s foreign policy.

The Opposition Leader said last night Senator Dastyari had paid a heavy price but he was “a young bloke with a bright future”, as senior Labor figures predicted he would make a comeback.

UPDATE: Reaction to Dastyari’s resignation

Senator Dastyari said he had been wrong to accept a $1670 payment from the Top Education Institute to settle a personal debt with the Finance Department, and conceded his position was untenable. “From the beginning, I freely admitted that I made a mistake,” he said. “I made all the necessary disclosures and what I did was within the rules, but it was wrong.

“I fell short of the duty I owe to the people I’m so proud to represent. I accept that, and I’m here to make it clear I accept the ­consequences.”

Senator Dastyari’s resignation came just hours before he was due to speak at the University of Queensland, where young Liberal protesters dressed in panda suits were planning to confront him with giant Bank of China credit cards that bore his name.

Turnbull government ministers had called for him to be sacked and said it had become a test of Mr Shorten’s leadership.

Senator Dastyari’s decision to stand down came a day after he held a news conference about the payment scandal at which he was unable to explain why he had ­approached the company owned by Chinese businessman Minshen Zhu to pay the travel bill on his ­behalf. Senator Dastyari had also received payment from another political donor, the Yuhu Group, to settle a $40,000 legal claim, and stood with the group’s chief executive Huang Xiangmo during the election campaign to express his support for China’s position in the South China Sea.

The senator, who said Australia should “remain neutral and ­respect” China’s position on the South China Sea dispute, denied the comments had been influenced by the payments, which Malcolm Turnbull had labelled “cash for comment”.

“If I have misspoken on this issue in the past … then I would have been wrong,” Senator Dastyari had said.

Labor sources said there was concern that further details would emerge about Senator Dastyari’s Chinese links, and would prove an ongoing distraction when parliament resumed next week.

Senator Dastyari’s “train wreck” news conference on Tuesday had also raised doubts within the party about the ambitious senator’s ability to withstand further scrutiny. Senior members of Senator Dastyari’s Right faction said there was concern that more damaging details about his links to the Chinese would emerge.

“It wasn’t going to end there,” one said. “With NSW, there is ­always more to come out.”

Labor’s erstwhile manager of opposition business in the Senate and consumer affairs spokesman said he recognised that the ­ongoing ­revelations about his ties to the Sydney Chinese community was now a “distraction” for the party and Mr Shorten. He said he had reflected after Tuesday’s press conference and decided he had needed to stand down.

“The last thing a government as bad and divided as this one deserves is a free pass. I refuse to be the reason they escape proper scrutiny,” he said.

“I’m not a shy person. I’ve never been afraid of the spotlight, but in the past week it’s clear that the ongoing examination of my behaviour is taking attention away from bigger issues facing Australia and Australians. It’s not fair to (Mr Shorten) or to the millions of people who rely on Labor for my personal issues to distract from the bigger fights they face — for jobs, schools, Medicare.”

Despite being in parliament for only three years, Senator Dastyari became Labor’s top attack dog in the campaign against multinational tax avoidance, with a starring role at Senate hearings, and he led the opposition’s political prosecution of banks over issues ranging from financial advice scandals to high fees and charges.

Just 24 hours after offering Senator Dastyari a “second chance”, Mr Shorten said it was a “measure of the man” that he had admitted his mistake and accepted the consequences. “Sam made a mistake, and now he’s paying a heavy price,” he said in a statement last night. “Sam is a young bloke with a bright future … He has a lot more to offer Labor and Australia. I’m confident he will continue to make a strong contribution to my team and continue standing up for the things that matter to all Australians.”

Resisting pressure to sack the senator earlier in the week, Mr Shorten said he had “severely” counselled the 33-year-old “junior” senator, and insisted he had “learned his lesson”.

Labor frontbencher Jason Clare, also from the NSW Right, said Senator Dastyari had done the “right thing” by declaring the $1670 payment that was used to cover excess travel costs owed by the senator. “If anything good comes out of this, hopefully it will remind people about the importance of transparency, of declaring things, and that might act as a trigger for more reform when it comes to the transparent disclosure of donations to political parties,” he told Sky News. “Perhaps let’s take it one step further — trigger that debate about banning donations from people who are not Australian citizens.”

After acknowledging his “difficult week”, Senator Dastyari thanked his wife, the Labor Party, rank and file members and his parliamentary colleagues for their support. “The Labor Party owes me nothing and I owe the Labor Party everything. I will continue to serve with pride as a senator for NSW and I look forward to serving a Labor government in the fear future in whatever capacity I can.”