The embattled Labor senator Sam Dastyari has stepped down from the frontbench amid questions about donations from a wealthy Chinese businessman.

Speaking in Sydney on Wednesday evening, he said that the issue had become a distraction that was damaging the party.

In asking for and accepting a payment of $1670.82 from a businessman Minshen Zhu, Dastyari said he had “fallen short” in his duty as a member of parliament.

Dastyari, who has since repaid the money, will step down from his position as manager of opposition business in the Senate after offering his resignation to Labor leader Bill Shorten on Wednesday afternoon.



Shorten released a short statement after Dastyari resigned, saying his senator had made a mistake and he was paying a heavy price.

But Shorten also appeared to open the way for his return to the frontbench.

“It’s the measure of the man that he can stand up, admit he got it wrong and accept the consequences,” Shorten said.

“Sam is a young bloke with a bright future ahead of him. 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 - good jobs, good schools, and protecting Medicare.”

The resignation will be a blow to Labor’s strategy in the upper house, given Dastyari was one of its key tacticians. He was a lead prosecutor for the opposition’s attack on bank malfeasance in the party’s push for a finance industry royal commission, and he was a skilled interrogator in Senate committees.

Dastyari said it had been a difficult week and a difficult decision.

“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 of 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. 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.”

Dastyari has been under pressure over the payment since it was revealed last week. He had kept a low profile until Tuesday, when he held a press conference to answer questions as to why he asked for the payment.

“Yesterday, I called the press conference and answered questions,” Dastyari said.

“Today, I have reflected on that and decided that wasn’t enough. It’s clear to me now that this has become a distraction. 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.”

The senator has been attacked over the payment and also earlier reports that he had a legal bill of $5,000 paid by the Yuhu Group chairman, Huang Xiangmo. Huang also gave Dastyari two bottles of Grange, which the senator gave away to charity.

But the payments were revealed in tandem with a Mandarin-based news report contained in Chinese language site Queensland Today, which suggested Dastyari believed Australia should remain neutral on the issue of the South China Sea dispute.

This was at odds with the Labor position, which backed the Australian government’s stance supporting an international ruling against China in the permanent court of arbitration in the Hague.

Malcolm Turnbull characterised Dastyari’s position change as “cash for comment”.

“I’m here in China standing up for Australia,” the prime minister said from the G20 summit at the wekend. “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.”

While not initially denying the news report, Dastyari told the ABC he could not be held responsible for the reporting of his comments.

He said he always supported Labor’s position on the South China Sea dispute



In his evening press conference just before 6pm in Sydney, Dastyari also thanked his wife Helen and the Labor party.

“I made a mistake and I’m paying the price for that mistake,” Dastyari said.

“I want to thank my amazing wife Helen, an inspiration and a role model to our two incredible daughters and I want to thank the Labor party for the support it has provided.”