Scott Morrison Defends 'Shanghai Sam' Denial

PM Scott Morrison has had to explain why he appeared to claim he never called Sam Dastyari 'Shanghai Sam' despite a wealth of video and audio capturing him saying that very phrase.

The Prime Minister was in Queensland on Friday, surveying the devastation that bushfires have wrought on the state.

He announced that fire victims would be eligible for 13 weeks worth of government assistance payments, but he was still dogged by the big political scandal of the week -- rookie MP Gladys Liu, and her connections to the Chinese Communist Party (CCP).

Liu, who won the Victorian seat of Chisholm at the May election, has come under fire in recent weeks for her connection to Australian organisations allegedly linked to the CCP.

She gave an interview to Sky News this week, widely described as a "trainwreck", where she failed to answer some questions which led to further doubts being raised over her political history.

Liu is congratulated by Morrison after delivering her maiden speech in the House of Representatives in July. Photo: AAP

Morrison -- who has been a big supporter of Liu since she was elected to parliament -- has stood by his new MP. On Thursday, he called out her critics, saying the doubts raised over her past had "a very grubby undertone in terms of the smear that is being placed" on her.

He downplayed the controversy by saying she "gave a clumsy interview" -- but  on Friday it was the PM himself momentarily derided as clumsy, for seemingly forgetting a whole month of his political life in 2016.

"Prime Minister why was it racist to question Gladys Liu's connections to China but it wasn't racist to call Sam Dastyari 'Shanghai Sam'?" a 10 News First journalist asked the PM in Brisbane.

"I didn't use either of those phrases, so... I think people here today are focused on the fires, not Canberra," Morrison said.

But as many pointed out, he has used the phrase 'Shanghai Sam' multiple times, during controversy over the former Labor senator's infamous scandals which led to his resignation from parliament.

Morrison said the phrase 'Shanghai Sam' at least eight times during 2016, according to transcripts of interviews and public appearances published on the treasury website, from his time as federal treasurer.

One of those times, Morrison even posted a video of him saying that phrase on his own Facebook and Twitter pages. The Sky News interview, from September 2016, was titled 'Shanghai Sam needs to go'.

But Morrison soon tried to clean up the brewing controversy, calling in to 2GB radio to explain the seeming lapse in memory. Speaking to host Ben Fordham -- on the very same show where he had actually said 'Shanghai Sam' at one stage in 2016 -- the PM claimed he had misheard the question.

Morrison said he did not hear every word in the question asked of him at the end of the press conference, and claimed that when he said "I didn't use either of those phrases", the "phrase" he referred to was "racism".

He freely admitted he had used the phrase 'Shanghai Sam' many times, but said he was responding to the "racist" part of the question.

In a Thursday press conference, Morrison was asked by a journalist if he was expressly leveling charges of racism against Liu's critics.

"I will let others draw their conclusions," he responded, not specifically saying the word 'racism'.

On 2GB on Friday, Morrison repeated his favourite phrase/criticism, fobbing off those focusing on his answer as being stuck in "the Canberra bubble".

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