Prime Minister Malcolm Turnbull has for the first time suggested he is prepared to consider creating a federal anti-corruption watchdog.
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Mr Turnbull said he is not yet persuaded the case has been made for such a body but that "the policy objective is zero tolerance, I take that very seriously".
With all other parties in the Federal Parliament prepared to support such a body, Mr Turnbull's government – which has thus far resisted calls from the crossbench, Greens and Labor – is the final obstacle.
And in an interview with Fairfax Media to mark the end of the Parliamentary year, Mr Turnbull also ramped up pressure on Bill Shorten to sack embattled NSW senator Sam Dastyari, arguing to do otherwise was a failure of leadership.
The Prime Minister also played down the impact on Australia-China relations of the government's new foreign interference legislation, arguing the furious reaction from Beijing was "of a kind that we have seen before".
Mr Turnbull said that if a federal anti-corruption body were to be created, he favoured something modelled on Victoria's IBAC, the independent broad-based anti-corruption commission, rather than New South Wales' ICAC, the Independent Commission Against Corruption.
The ICAC has been criticised for having powers that are too broad; the IBAC has, conversely, been criticised for powers that are too narrow and do not allow it to fully investigate suspicions of corruption or misconduct in public office.
After a difficult 2017 that saw the Coalition consistently trail Labor in published opinion polls – and his government beset by divisions over same-sex marriage, the citizenship crisis and energy policy – an optimistic Mr Turnbull said he had dealt with those three large "barnacles" attached to the ship of state.
Heading into 2018, his focus will be on delivering personal income tax cuts for middle Australia and trying again to cut company taxes for businesses with a turnover of more than $50 million a year.
But it is his failure to rule out a federal anti-corruption watchdog that is most significant.
"New South Wales, we all understand the problems that arise if these things turn into places where hearsay and rumour can be thrown around free of any responsibility," he said, referring to that state's anti-corruption body.
"So you have to make sure that you re-assess these agencies, reassess the work they are doing, ask the question if they are adequate to the task – there has been a Senate Select Committee recently [looking] at a National Integrity Commission."
"I am considering that report very carefully and if the government's conclusion is that there are gaps in our armoury, then we will look at the best way to fill them. But you have just got to make sure that you get it right, as the experience has been mixed."
The Senate inquiry, which concluded in September 2017, recommended the Commonwealth give careful "consideration to establishing a Commonwealth agency with broad scope and jurisdiction to address integrity and corruption matters", as well as a Parliamentary Integrity Commissioner.
It also suggested additional resources be allocated to the Australian Commission for Law Enforcement Integrity (ACLEI), which monitors police agencies.
There have already been discussions in the public service about transforming a "super-sized" ACLEI into an anti-corruption body.
On Senator Dastyari, who is under mounting pressure to quit Parliament over his links to Chinese Communist Party-linked political donor Huang Xiangmo, Mr Turnbull said it was "absolutely screamingly obvious that Dastyari should not be in the Senate".
"The Dastyari episode is a shocking one, I think it will provoke nothing less than contempt in Beijing that an Australian senator would behave in this way – and it's a terrible indictment on Shorten and his failure of leadership," he said.
The proposed foreign interference laws were not about China, he said, but simply focused on ensuring that anyone who sought to influence Australian politics and decision making did so openly.
"There is no taint about representing the interests of a foreign government in Australia, as long as you do so transparently and honestly."
Mr Turnbull would not comment on whether any state or federal politicians had been identified by government agencies as possible agents of foreign influence.
Mr Turnbull suggested that the significantly changed complexion of the Senate crossbench – six senators, including two from One Nation, two from the NXT, one Family First senator and Jacqui Lambie have all gone – could open the door to his government successfully steering the company tax cut through.
But in a direct pitch to middle Australia, Mr Turnbull said "the next priority is personal income tax cuts, middle income tax cuts – the timing and extent [of which] is obviously a question of affordability".
