Door to Cabinet still open for Heatley, says Key

Phil Heatley at his press conference this morning. Photo / Mark Mitchell

The door is still open for Phil Heatley to return to Cabinet providing an Auditor-General investigation into his ministerial expenses comes back clean, Prime Minister John Key said today.

Mr Heatley resigned from his housing and fisheries portfolios this morning over an error in his expense accounts.

Click here to read the full statement.

Mr Heatley's $70 expenses claim said the spending was listed as 'Minister and Spouse: dinner'.

But the credit card instead showed it was used for two bottles of wine for his and his wife's table at the National Party Conference.

It was the second time Mr Heatley had been found to have mis-used his ministerial credit card this week.

On Tuesday Mr Heatley handed in his credit card and paid back about $1100 on when it was revealed he used it for personal expenses, including a family trip in the South Island.

Despite the slip-ups Mr Key said he hadn't lost confidence in his resigning housing minister and wouldn't have asked him to quit had he not insisted on resigning.

"I wouldn't have asked him to resign. It would have been my preferred pathway that he chose to stand down [during the Auditor-General's investigation] because I think that's important, but I wouldn't have asked for his resignation. It was the minister himself who offered his resignation and I have respectfully had to accept that."

Mr Key says he's asked the Auditor-General to conduct an audit into Mr Heatley's ministerial expenses.

"It came to my attention yesterday that the documentation used to support Mr Heatley's expenses claim for $70 in Christchurch last year was incorrect,' Mr Key said.

"Everyone is human and makes mistakes from time to time," Mr Key said.

"This is an example of a minister who takes his responsibilities seriously. It was his decision to offer his resignation."

Mr Key said Mr Heatley might have been too hard on himself.

"There's no question that he's used his credit card for inappropriate expenditure. That's a statement of fact.

"His actions have been untidy and they have been careless. It's not a systematic attempt by Mr Heatley to rort the system.

"He has signed a document and a declaration that is inaccurate. That does not mean he intentionally did so."

Mr Heatley's understanding of the rules had been incorrect and his motivations were "genuine and honest", Mr Key said.

Ministerial Services brought the receipts in question to the attention of Mr Key, who asked Mr Heatley about it yesterday morning.

Last night Mr Heatley told Mr Key that he wanted to resign and hand over his accounts to the scrutiny of the Auditor-General, but Mr Key told him he would prefer that he stand down during the Auditor-General process.

He told Mr Heatley to sleep on it, and he would accept whatever decision he came to in the morning.

Mr Heatley called to offer his resignation this morning, and it was accepted.

Maurice Williams and David Carter will take up the housing and fisheries portfolios, Mr Key said.

Heatley's apology

Earlier today, Mr Heatley told a media conference he had offered his resignation to Mr Key and the resignation was accepted.

"It's been a privilege to serve the people of New Zealand as a Cabinet minister in this National Government but I believe I've failed to live up to my own standard and for that I'm embarrassed and immensely sorry," Mr Heatley said.

"The decision today comes after I've had a closer look at my ministerial credit card expenses covering the past 18 months.

"As I explained earlier this week, I was not as familiar as I should have been with the rules, in fact I was careless."

Speaking to reporters this morning, Mr Heatley apologised and promised to pay back any money that was wrongly billed.

He said his accounts showed an error in addition to that already highlighted this week: an expense claim charging two bottles of wine as "food and beverages".

"But rather than arguing semantics about whether this was deliberately misleading or not, I have decided that this was one step too far and I offered my resignation to the Prime Minister this morning," he said.

"I have no desire to become the focus of distraction for this Government."

The expenses form shows two transactions on August 1, 2009, at the time of the National Party Conference.

They are:

Minister and spouse - CHC airport - $59
Minister and spouse - Dinner $70

Mr Heatley said it was the second transaction that was inaccurate, as he had signed the receipts for both as "Food and Beverage" expenses for the "Minister and spouse".

The receipt is from AMI stadium.

The receipt for $59 is from Barcelona Restaurant at Christchurch Airport.

Mr Heatley said he would stay on in Government as MP for Whangarei and thanked those who have supported him over the "tough" past few days, including his family and electorate supporters.

When asked if he wanted Mr Key to accept his resignation, he said: "I wanted him to accept it because I meant it. I wanted to resign.

"I haven't lived up to my own standards. I think I need to spend a long time on the back benches."

Mr Heatley handed in his credit card and paid back about $1100 on Tuesday, when it was revealed he used his ministerial credit card for personal expenses, including a family trip in the South Island.

He made an emotional apology, saying any misuse had been unintentional.

He was close to tears as he cut up his credit card in front of journalists.

Last year, Mr Heatley used a 75 per cent airfare discount available for MPs on a holiday with his wife in the Cook Islands.

In October, it was found he had spent only $813 on his own international ministerial travel, but racked up $11,302 on his Map's perk.

And when Mr Key introduced an MP housing allowance limit at $37,500 a year, Mr Heatley's Wellington residence was found to be $15,838 over budget.

He defended his apartment's cost saying he had young children he wanted to live with in Wellington.

He rented a Wellington apartment for $946 a week, and also owned another he rented out to fellow National MP Louise Upton for $355 a week.

He served as the National Government's Housing and Fisheries Minister since the last elections.

Mr Heatley is the second minister in John Key's Government to resign, after Richard Worth.

MPs' and ministers' expenses for the October-December 2009 period were released today.

Mr Heatley claimed $42,902 during the three months, in line with other ministers' claims.

- with NZ Herald staff, NZPA