Labor has indicated it will continue to call for a ban on foreign donations after the resignation of Senator Sam Dastyari from the shadow ministry.
The government’s position appears to be shifting, with several figures indicating they are open to reviewing foreign, union and corporate donations but none prepared yet to give a clear direction on which reforms the Coalition would accept.
On Wednesday Dastyari stepped down from the frontbench, saying the issue of gifts from a wealthy Chinese businessman had become a distraction for the Labor party. In asking for and accepting a payment of $1,670.82 from Minshen Zhu, Dastyari said he had “fallen short” in his duty as a member of parliament.
On Thursday the Liberal leader of the house, Christopher Pyne, said Dastyari had “quit for the wrong reasons” and he should have resigned “because it was wrong to have his debts paid by Chinese businessmen and change his position on the South China Sea”.
When asked on Radio National if the government would consider banning foreign donations, Pyne said Australia needed a “wider discussion about donations” from unions, businesses, foreign donations and third-party campaigns.
He said the political system was skewed by tens of millions of dollars of union campaign spending which allowed Labor and the unions to outspend the Liberal party by “two or three to one”.
“We do need to look at third-party campaigning, how that fits with the constitution, because there is an implied right to freedom of speech,” he said. “I don’t think that anyone in the political world believes we can leave things as they are.”
Pyne did not set out a concrete path for the way forward on campaign finance reform and said the issue would wait until Malcolm Turnbull returned from overseas.
He said that in 2007 he had argued that only individuals should be able to donate to political parties and noted that Turnbull had said the same. The position is shared by ministers including Steven Ciobo and Darren Chester, and the backbench MPs Cory Bernardi and Craig Kelly.
But such a change faces constitutional hurdles because the high court found in 2013 that a New South Wales law limiting donations to individuals breached the implied freedom of political communication.
Pyne said he was “unfussed about foreign donations, as long as they are properly declared and they are from individuals”. “People are entitled to support the political party of their choice.”
The shadow attorney general, Mark Dreyfus, told ABC’s AM that Dastyari had not broken the law and had disclosed the gifts.
The resignation was “the end of it”, he said, but he added there was the prospect Dastyari could return to the frontbench in the future if caucus and the leader wanted him to.
“It’s given us a reason to focus on the question of foreign donations, and donations more generally,” he said.
Dreyfus noted that a number of Coalition figures had backed a ban on foreign donations and said it was “time for the government to seriously sit down with Labor and work through what those changes should be”.
“A starting point should be more transparency, a starting point should be lowering the threshold [to declare donations], and very importantly – John Howard was talking about this – we need to have more timely disclosure. Real-time disclosure should be possible.”
Dreyfus noted that Chinese business interests had donated $500,000 to the West Australian branch of the Liberal party and that the foreign minister, Julie Bishop, had received a tablet computer and free trip to China from Huawei.
The deputy leader of the opposition in the Senate, Stephen Conroy, said on Radio National that Australians would be “horrified by the fact the Liberal party supports foreign companies being able to donate”. He said most western countries – 118 in total – had banned foreign donations.
Speaking in Germany Bishop said there was “absolutely no correlation between political donations from, in some cases, Chinese-Australian residents and the circumstances that Sam Dastyari found himself in – touting for a personal payment from another entity”.
A spokeswoman for Bishop told Guardian Australia: “Many members, on all sides of politics have accepted sponsored travel from time to time.
“The foreign minister has complied with the register of interests. The foreign minister’s decisions on all matters are taken in the national interest.”
