Labor senator Sam Dastyari has called for an end to the way in which parties compete for donors, and a total ban on all future political donations.

It’s a stunning about-face after his resignation from Labor’s frontbench last September in the wake of a political donations scandal.

“I come at this from someone who wasn’t just part of the arms race … I was one of the weapon suppliers in this arms race … and responsible for fundraising across the party. It needs to come to an end, and the time for that is now,” Senator Dastyari told ABC’s Australian Story.

“I’m a realist on this and saying this needs to change.

“We have to reform. We need to ban, to limit, to restrict donations in so far as it’s constitutionally possible to do so.”

Senator Dastyari’s call for a halt to all political donations goes far beyond the recent push across party lines for a ban on foreign donations, which are lawful in Australia.

“We live in a country where people or organisations with clear links to foreign government can donate millions of dollars,” independent MP Andrew Wilkie said.

Labor leader Bill Shorten said his party should not take money from foreign donors and has asked his party to implement that standard.

“I’m happy to reiterate my invitation to Malcolm Turnbull. Malcolm … we should shake hands and make it a gentleman’s agreement — No foreign money in our election process. Labor’s happy to work with the Liberals and implement a standard even in advance of the law,” he said.

However, Mr Shorten fell short of supporting Senator Dastyari’s call for a ban on all donations.

“I’m not sure that the public is ready to pick up the tab for elections,” he said.

“I do think it’s okay for people to make donations, [for] Australians and Australian organisations to contribute to the political process, but there’s no doubt that we need transparency.

But Liberal Senator and Attorney-General George Brandis said Mr Shorten was yet to support his party’s push to ban foreign political donations.

“The Turnbull Government has decided to seek to ban foreign political donations subject to any constitutional issues that might arise … Mr Turnbull has committed to do this as a matter of law, and we’re yet to see Mr Shorten agree to it.”

As general secretary of the New South Wales ALP from 2010-2013, Senator Dastyari was the Labor Party’s chief fundraiser in the state.

A large proportion of the funds raised during that time came from donors within the Chinese community, including Huang Xiangmo — a billionaire property developer.

Huang Xiangmo (second from left) with Ernest Wong, former prime minster Julia Gillard and Sam Dastyari.

During last year’s federal election campaign, Senator Dastyari and Huang Xiangmo stood alongside one another, as Senator Dastyari spoke about the South China Sea.

Journalist Primrose Riordan told Australian Story it occurred at a press conference held specifically for Chinese media in Sydney.

“I came across some Chinese media reporting about a press conference that was held during the election campaign. Sam Dastyari had stood next to Mr Huang and basically had said that Australia would respect China’s position on the South China Sea, which was very much in conflict with the Labor Party position at the time,” she said.

Almost 12 months on, Senator Dastyari said he should never have taken the question.

“I accept that I gave the wrong answer and that answer was in contrast to what the Labor position was. I got the answer wrong,” he said.

Senator Dastyari admits he became too close to donors

The Senator resigned from his position as Manager of Opposition Business in the Senate after it was revealed that he had asked Top Education, a company with links to the Chinese state, to pay an overspend on his office’s travel of $1,670.

“I handled that in the way I would have handled it if I was still the party secretary of New South Wales, if it was a campaign bill. It wasn’t a campaign bill, it was an office over expense. So what I did, I contacted a donor, I asked them to donate, they did. I put it on my declaration,” Senator Dastyari said.

When the storm broke around Senator Dastyari last year, former NSW Premier Kristina Keneally questioned him on his actions.

“I remember asking him: ‘Why did you do this? How are you going to explain this? Why did you do this?’,” she said.

“And he said: ‘Because I didn’t want to pay the bill’. I said ‘Well, don’t say that, you’ll be forever known as the guy who didn’t want to pay his bill, but he said: ‘That’s the truth’.”

Senator Dastyari now concedes he became too close to some donors.

“I should have had greater distance between myself and the donors, if for no other reason than because of perception. I didn’t do that and I paid the price for that,” he said.

Mr Shorten, however, has made it clear there is little prospect of Senator Dastyari being reappointed to a senior Senate position any time soon.

“I did think he’d been incredibly naive. I don’t think for a second he was trying to enrich himself, but it was poor judgment. It was very, very poor judgment, no question… you’ve got to make atonement for it,” Mr Shorten said.

“You can’t just think that you live in a business without consequences.

“He’s got to demonstrate not just to me but to his colleagues that he’s learned his lesson.”