The Turnbull Government has called for Labor senator Sam Dastyari to be hauled before the powerful privileges committee to further explain his relationship with a wealthy Chinese political donor.

Key points: Attorney-General George Brandis to refer Sam Dastyari to privileges committee

Attorney-General George Brandis to refer Sam Dastyari to privileges committee PM says former trade minister Andrew Robb misunderstood new foreign interference laws

PM says former trade minister Andrew Robb misunderstood new foreign interference laws Bill Shorten says Turnbull Government is spreading "China-phobia"

The push comes days after Malcolm Turnbull announced a ban on foreign donations and new political interference laws, which could see those meddling in Australian democracy on behalf of another nation face jail time.

Attorney-General George Brandis said Senator Dastyari's behaviour had been disgraceful and that he allowed himself to be "suborned or compromised" by China and had no other than choice except to resign.

The NSW Labor senator has come under sustained political pressure after defending China's policy on the South China Sea in defiance of his own party's position, while flanked by billionaire political donor Huang Xiangmo.

The privileges committee would consider whether Senator Dastyari has held the Upper House in contempt by using his office to obtain benefits.

Senator Dastyari has denied ever having knowledge of sensitive intelligence when he allegedly asked Mr Huang to leave his phone inside when they had a conversation at his house last year.

Opposition Leader Bill Shorten said plans to refer Senator Dastyari to the committee were a "stunt" and accused the Turnbull Government of spreading "China-phobia".

"Sam Dastyari exercised poor judgement," Mr Shorten said.

"His career is going nowhere fast.

"Make your political points about Sam Dastyari, but let's not destroy our relationship with China and use China-phobia."

Turnbull says Andrew Robb misunderstood new laws

The Prime Minister has sought to assure former trade minister Andrew Robb that being listed on a new foreign lobbyist register does not "taint" him.

Mr Robb, who accepted an $880,000 part-time job as a consultant to the Chinese company operating Darwin Port just days after the 2016 election, was apparently furious as being used as an example case for the laws.

"Somebody in Mr Robb's position would be required to register under the transparency scheme," Senator Brandis said, while announcing the laws.

Mr Turnbull said he had not spoken with Mr Robb, who he described as "a great patriot", but suggested he did not understand how the laws would work.

"I think Andrew has somehow or other misunderstood what is being done here," Mr Turnbull said.

"If you are a former cabinet minister and you are working for a foreign principal, a foreign government, or a foreign state-owned enterprise or something like that — then you are on a register.

"But there's no harm in that. I mean, it's like being on the lobbyists' register."

Mr Shorten said Mr Robb's concerns showed the Turnbull Government was guilty of overreach.

"I think it is remarkable that Andrew Robb, who was extolled as one of the most marvellous people ever born, is now being caught up in this overreach and China-phobia," Mr Shorten said.

Mr Turnbull said it was Labor that was trying to attack Mr Robb.

"The Labor Party are the ones that tried to smear him," he said.

"They were trying to compare him to Senator Dastyari and I mean, that's absurd."