In a question to Housing Minister Maryan Street, he said: "What does she think the thousands of desperate families on the waiting list, or those who live in squalid boarding houses, think about 94 of the corporations;' staff spending two days at the luxury Tongariro Lodge?"
Maryan Street defended it, saying the cost had been $250 a night per person including food and venue hire for the conference.
"That was not a luxury price."
Winter/spring rates for Tongariro Lodge are listed as $400 for a share/twin and $434 for a single. The rate includes a cooked breakfast and a four-course dinner.
Ms Street said the conference had focused on the corporation's strategic vision, its goals and improving service delivery.
"If that is the upshot of this conference, done at cheap rates, then I am all for it."
The people at the conference were those who would be responsible for insulating 21,000 state houses over the next five years - a programme which received extra money in the Budget.
Mocking the lodge's publicity material, Mr Heatley asked: "What does she think that desperate families who are living in squalid conditions do in their free time - gourmet dining, trout fishing or just 'sitting in front of an open fire over a four-course evening meal, recounting the day's activities' and just how out of touch is this Government?"
One Housing New Zealand tenant, Dot, last night told the Herald the money could have been better spent installing more locks - and even alarms - in state houses.
She was emphatic when told last night of HNZ's $65,000 conference. "That sucks. They could be spending all that money on doing up these houses.
"Every week I'm ringing them to fix windows and taps, but they never come. It's coming up to winter and it's freezing here."
Dot, who did not want to give her surname, says she has been asking HNZ for years for a bigger house than her current place in Kupe St, Orakei, where she has lived for eight years.
She sleeps in the bedroom, and her 17 and 18-year-old children sleep in the lounge.
"All my family lives on the street, I'm not going anywhere."
Dot - who pays $170 a week in rent |- said the $250 a night Tongariro Lodge charge would cover her grocery bill for about three weeks. The $65,000 cost of the trip would pay her rent for more than seven years.
Another Kupe St resident, 22-year-old Leanne Oneroa, pays $89 a week for the two-bedroom house she shares with her partner and their 3-year-old son.
She believed $250 would also go a long way in their household.
"It's too much to spend. That would fill up my freezer and my cupboard."
The political storm has echoes of 1999 when another Government agency, Winz - also dealing with the poorest of society - chartered a plane for staff attending a staff training conference at the Wairakei Resort.
However its price tag of $235,000 puts the Housing New Zealand conference in the shade.