Former New South Wales Labor minister Rodney Cavalier has slammed ousted frontbencher Sam Dastyari as a "living example of the culture of entitlement" that pervades the party.

Key points: Rodney Cavalier drafted legislation for public funding of election campaigns in 1980s

Rodney Cavalier drafted legislation for public funding of election campaigns in 1980s "What Senator Dastyari has done is very much in character," Mr Cavalier says

"What Senator Dastyari has done is very much in character," Mr Cavalier says He says more needs to be done to fix political donations system

Senator Dastyari resigned from Labor's frontbench this week after it was revealed he asked a Chinese-linked company to pay a $1,600 travel debt.

"What Senator Dastyari has done is very much in character," Mr Cavalier said.

"He is a living example of the culture of entitlement that pervades the NSW branch of Australian Labor, the other branches across Australia, and increasingly the Liberal Party across Australia."

Mr Cavalier was a member of the NSW Government committee that drafted legislation for the public funding of election campaigns in the early 1980s. The legislation was introduced and passed by the Wran government.

The former state member for Fuller said he now could not "think of anything I've ever done that is more ham fisted and ultimately stupid".

"I didn't imagine it would turn into the tyrannical monster it has become. It has led to the destruction of democracy in the major parties and given a culture of entitlement to the machine leaderships," he said.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 5 minutes 54 seconds 5 m Rodney Cavalier says what Senator Dastyari did was "very much in character".

Mr Cavalier said that under original guidelines, candidates were only meant to be reimbursed for direct election expenses.

"Every principle … has been debauched," he said.

"No money now goes to the constituency. It now goes to the head offices."

Banning foreign donations 'pointless'

Mr Cavalier said more needed to be done to fix the political donations system than banning foreign donations, adding it would "change nothing".

Former Liberal Party honorary treasurer Michael Yabsley agreed.

"That might be a good start, but the idea that that is meaningful reform is nonsense," he said.

Citing the success of former US Democratic candidate Bernie Sanders' grassroots fundraising campaign, Mr Yabsley said he would like to see Australia adopt a funding system allowing for a high volume of low-value donations.

Senator Sanders raised millions by urging his supporters to chip in what they could, whether it was $US10, $20, or $50.

"That would allow not only political parties to get on with the job, but it would re-democratise political parties as we know them," Mr Yabsley said.

"Political parties have grown fat and lazy.

"A number of tributaries all have corrupted way political fundraising carried out. That's what got to be tackled."