The prime minister, Scott Morrison, has told parliament he misheard a question from a journalist when he denied using the term Shanghai Sam, as Labor continues to attack the government over embattled Chinese-born MP Gladys Liu.

In question time on Monday, the Labor leader, Anthony Albanese, asked Morrison why he had denied using the term about former NSW Labor senator Sam Dastyari when he had used the phrase 17 times, including in the House of Representatives.

Morrison told Albanese he needed to “grow up”, and claimed he had misheard the question put to him during a press conference on Friday.

“I heard the word racism used twice in that question and that is what I was referring to,” Morrison said.

“If the best that the leader of the opposition can drum up is that withering attack, then I’m sure there is a lot of optimistic people who sit on the backbench of the Labor party who can see a big opportunity for themselves,” Morrison said.

Labor has continued the attack on Liu’s background following a series of revelations about her alleged ties to organisations linked to the Chinese Communist party and fundraising activities that have attracted the attention of security agencies.

The New Daily also reported on Monday that a $105,000 donation linked to Liu from the Chinese-owned company Brighsun was paid to the Liberal party despite the fact a dinner with then prime minister Malcolm Turnbull – which was the objective of the donation – did not proceed.

Labor focusing in on the Gladys Liu matter and Scott Morrison’s use of ‘Shanghai Sam’ - in both the House of Reps and the Senate. pic.twitter.com/c3pW0m4tle — Guardian Australia (@GuardianAus) September 16, 2019

As Morrison has sought to deflect questions about Liu’s background, the prime minister has suggested Labor was “casting a smear” on all Chinese Australians by questioning her loyalty.

But when asked by a reporter why it was racist to question Liu’s connections to China but it not racist to call Dastyari “Shanghai Sam”, Morrison said: “I didn’t use either of those phrases.”

When questioned further about the press conference, Morrison turned on the “weakness and lameness” of Albanese.

“What is he doing all day? Poring over transcripts, worrying about this word and that word. This country is in drought, this country is facing natural disasters, this country is facing severe economic challenges, and the leader of the opposition is running around like a researcher looking up grabs.”

Morrison also accused Labor of trying to distract attention from “their own woes”, pointing to Icac hearings in Sydney that had uncovered revelations of cash donations to the NSW Labor party and remarks made by former state leader Michael Daley about Asian migrants threatening local jobs.

Labor again attempted to suspend standing orders on Monday, demanding that Liu explain to the chamber her “associations and fundraising activities” and questions about her fitness to be an MP.

Albanese said “legitimate questions” had been raised about Liu’s background.

“The prime minister has prevented the member for Chisholm from providing a full statement in her own words to this house where words carry consequences, and instead relied on a statement prepared by the PMO issued outside the house,” Albanese said.

“On Friday the prime minister denied using the phrase ‘Shanghai Sam’ despite using it at least 17 times, including twice in the House. And the prime minister’s attempt to cover up his untruth on Friday with another untruth is just the latest in a long line of misdirection and obfuscation from this prime minister.”

He said Morrison had been exposed for his “hubris, opportunism and hypocrisy”.