Tanya Plibersek was forced to defend Anthony Albanese’s attendance at a fundraising dinner hosted at a luxury Point Piper mansion, insisting the Prime Minister could not reasonably be expected to know the background of every person connected to events he attends.

The Prime Minister has faced mounting scrutiny after attending the intimate fundraiser at the $40 million Sydney harbourside home of the son of a Chinese billionaire accused by the Australian Taxation Office of tax deception.

Appearing on Sunrise on Monday, Ms Plibersek rejected suggestions Mr Albanese had failed to explain his attendance, after he faced criticism over his initial response to questions about the event.

“He very clearly said, ‘Yeah, it’s been reported I was there’. I think the amounts that have been reported are wildly inaccurate,” she said.

Ms Plibersek pointed to reports in The Sydney Morning Herald suggesting the event raised less than $100,000, disputing larger figures that have circulated publicly.

She said attending business and fundraising events was a routine part of the Prime Minister’s job and argued it was unrealistic to expect exhaustive background checks before every function.

“He’s the Prime Minister. He goes to dinners every night of the week just about, and he meets with people all the time. It is actually part of the job.”

Ms Plibersek also stressed the businessman at the centre of the controversy was not present at the dinner.

“The guy that you’re talking about wasn’t at the dinner. It was at his son’s place, not him.”

While acknowledging why Australians had questions about the fundraiser, she argued Labor’s incoming electoral funding reforms would make similar events far more transparent in future.

“I’m super proud of the changes that we’re making to our electoral donation disclosure laws,” she said.

The reforms, due to begin on January 1, will cap individual political donations at $50,000, lower disclosure thresholds to $5,000, require donations to be disclosed within days instead of months and introduce campaign spending caps.

Ms Plibersek said the changes would reduce the influence of money in politics and make fundraising more transparent.

“We’re actually putting spending caps onto campaigns,” she said.

“I think we have a much better chance of reducing the need to do this sort of fundraising.”

But Nationals senator Matt Canavan said the controversy raised serious questions about the Prime Minister’s judgment and called on Labor to reject any donation linked to the event.

“At the very least here, the Prime Minister needs to explain why he didn’t know these issues,” Senator Canavan said.

“Apparently, he said he didn’t know these issues. Well, it’s at least a very big failing of his office not to properly assess and do due diligence on the people he’s going to meet at someone’s house.”

Senator Canavan said returning the money would be the simplest way to restore confidence.

“What the Labor Party should clearly do here is just give back the money, or not take the donation. I’m not sure the status of it, but just don’t take it.”

“That would help restore integrity and respect in the Prime Minister’s office.”

He also questioned why Labor’s electoral funding reforms would not take effect immediately if the Government believed they were necessary.

“If these laws that Tanya just spent minutes talking about are so good ... why don’t they come into effect now? Just don’t take this money.”

Pressed repeatedly on whether the donation should be returned, Ms Plibersek declined to weigh in, saying the matter rested with the Labor Party organisation rather than the Prime Minister personally.

“It’s a matter for the party,” she said.

“The Prime Minister doesn’t see a dollar of it. This is a matter for the party.”