Shorten facing ALP split as powerbroker Dastyari departs

Bill Shorten has stoked tensions with Labor’s powerful NSW right faction after urging Sam Dastyari over the past few days to quit.

Labor’s Sam Dastyari announces his resignation yesterday after it emerged he tipped off billionaire Huang Xiangmo about possible surveillance. Picture: John Feder

Bill Shorten has stoked tensions with Labor’s powerful NSW right faction after the Opposition Leader and Labor frontbenchers contacted Sam Dastyari over the past few days to urge him to quit the Senate.

Senator Dastyari’s resignation over the Chinese donations scandal yesterday boosts Labor’s chances in the Bennelong by-election on Saturday but there were complaints last night from some NSW right-wing MPs about the way he was forced out, exposing divisions for the first time since Labor lost office in 2013.

It is understood Mr Shorten spoke to Senator Dastyari several times over the 48 hours before he fell on his sword at 10.30am yesterday.

A senior NSW right source said: “Sam Dastyari may have done some silly things but everything he did, he did in the name of the party. The major parties are in competition for donations; he was acting on behalf of the party.

“Some on Labor’s side made it impossible to stay loyal to the party and remain in parliament.

“No one close to Sam put any pressure on him but it did become clear to him and his strongest supporters that a few people on our side were out to leave him with no other option but to tap the mat for the sake of the party he remains so loyal to.”

The divisions were highlighted on Monday when left-wing frontbenchers Linda Burney and Catherine King said Senator Dastyari was considering his future but the Labor powerbroker was defended by leadership hopeful Anthony Albanese and fellow frontbencher Tony Burke.

Senator Dastyari announced his resignation yesterday but could conceivably collect a further $20,000 in salary, signalling he might not step aside until the NSW parliament holds a joint sitting in February to fill the Senate casual vacancy.

Liberals deputy leader Julie Bishop called on him to resign immediately, saying he “shouldn’t receive another cent in salary from the Australian people”.

Bennelong candidate and former premier Kristina Keneally is expected to be offered Senator Dastyari’s seat should she just fall short in the by-election fight against Liberal John Alexander.

The second frontrunner, should Ms Keneally win Bennelong, is United Voice NSW secretary Tara Moriarty.

GRAPHIC: Dastyari’s rollercoaster ride

Senator Dastyari quit after a series of revelations over the past fortnight about his involvement with Chinese political donor Huang Xiangmo, including that he suggested to Mr Huang that their phones might have been tapped by security agencies.

“When you have our shadows (opposition spokespeople) getting up and the first six questions are about Sam, and the government ministers get up and the first six questions are about Sam, something’s got to give,” one Labor ­operative said, explaining the decision by Mr Shorten to urge Senator Dastyari to quit ahead of the Bennelong by-election.

Senator Dastyari’s slide began when he had to quit the Labor frontbench last year after contradicting Labor policy on the South China Sea to favour the Chinese position and accepting payments for legal and travel bills from Mr Huang.

“Today, after much reflection, I have decided that the best service I can render to the federal parliamentary Labor Party is to not return to the Senate in 2018,” a visibly shaken Senator Dastyari said yesterday. “I have not reached this decision lightly, but in my deliberations I have been guided by my Labor values, which tell me I should leave if my ongoing presence detracts from the pursuit of Labor’s mission. It is evident to me we are at that point. So I will spare the party any further distraction.

“I have always put the pursuit of the Labor cause first. Reflecting on the events which led to my decision, I leave knowing that I have always honoured my parliamentary oath, I have always acted with integrity, and I remain a loyal, patriotic Australian.”

Senator Dastyari claimed credit for the establishment of a royal commission into the banking sector. “I will co-ordinate my departure with the NSW branch. I will continue to be an active grassroots member of the Labor Party,” he said. “For now, I wish to thank all of the many people who have supported me. Firstly, Bill Shorten. He is a first-rate Labor leader. He will make a first-rate prime minister. I thank him for his patience, and for his perseverance.”

He also thanked Labor NSW general secretary Kaila Murnain.

“I said earlier in the statement that I am a patriotic Australian,” he said. “I meant that with all my heart and I leave the Senate with nothing but good thoughts for our country and for our people.”

Mr Shorten said the resignation had come after days of discussions during which Senator Dastyari had “recognised both publicly and privately his career was going nowhere”.

“I want to say that he is a decent person and loyal Australian,” Mr Shorten said. “I don’t for one minute accept the government’s characterisation of him being a traitor to Australia. For the record, ultimately this was his decision and I support and commend his decision.”

Mr Shorten refused to rule out Ms Keneally being parachuted into the vacant Senate seat. “I’m ruling in (that) we will do everything we can to win (Bennelong),” he said. Mr Shorten had earlier said: “Following our discussions, Sam Dastyari informed me this morning that he was resigning from the Senate. I told him I thought this was the right decision. I thanked him for his service to the parliament, to the state of NSW and to the Australian Labor Party.

“Sam Dastyari is a good, decent and loyal Australian, and an effective parliamentarian, but his judgment has let him down and now he has paid the heaviest price.”

Ms Bishop, campaigning in Bennelong, suggested Labor had “stage managed” the exit as a “backstop” for Ms Keneally in case she fails to win Bennelong.