Wellington, March 30 NZPA - Phil Heatley will be reinstated to Cabinet on Thursday after the Auditor-General's inquiry found that while he spent $1402 of taxpayers' money wrongly he did not intentionally break the rules.
Prime Minister John Key made the announcement in Auckland this afternoon.
"I think any reasonable New Zealander that reads the report would reach the same conclusion that I did -- that there was no deliberate attempt to rort the taxpayer, while there were one or two mistakes made... the rules are in fact quite confusing."
Labour leader Phil Goff, after earlier saying Mr Heatley should not be resinstated, said: "Mr Key has made a judgment call and New Zealanders will make up their own minds."
Mr Heatley resigned his housing and fisheries and aquaculture portfolios on February 25 after admitting he misused his credit card.
Auditor-General Lyn Provost today published her report into Mr Heatley's ministerial spending from when he became a minister in November 2008 until he quit.
A further report would look into wider issues around rules, policies and procedures and could uncover issues with other MPs' spending.
Today's report found $1402 of Mr Heatley's expenditure - $608 from Ministerial Services and $794 from Parliamentary Service - was outside the rules which the minister had misunderstood and criticised the lack of care taken.
The spending was for family travel and a $70 bill for wine at a National Party conference.
The wrong spending was approved by officials and went unquestioned.
Mr Key said Mr Heatley took responsibility for his actions and had not tried to hide anything. There had been no attempt to rip off the taxpayer and there was not more to the story as Labour deputy leader Annette King previously claimed.
"I think Mr Heatley is a very good minister, I now want him to get on and actually take charge of his portfolio areas."
Mr Key said the report was a wake up call for MPs that they needed to be more careful about expenses.
"But it's not my view that a reasonable person would exclude someone forever from Cabinet because of the findings of this report... I think that he has acknowledged that he's learnt some lessons from this experience and I am sure he will be very careful in the future."
A relieved Mr Heatley told NZPA he had accepted the reinstatement, but would not say if he had asked for his job back.
"I am pleased to be back on the horse and keen to get on with it... He was happy to take me back and I was enthusiastic about getting back."
Mr Heatley said he would get on with his work and it was up to others to decide the rights and wrongs of his reinstatement.
Earlier in the afternoon Mr Goff said a speedy return for Mr Heatley would make his earlier resignation "a very temporary sanction".
"I think to be serious about high standards the prime minister needs to continue that sanction against Mr Heatley."
He was dubious about suggestions some of the misspending was an oversight and said Mr Heatley had very quickly developed a sense of entitlement.
"It's very hard to take a holiday with your family and pay for it on your Crown credit card and not know that you shouldn't be paying for that personally. It's very hard to buy a bottle of wine and then describe it as a meal with your spouse."
Ministers have travel and costs met when they are working and can claim for partners when they are needed to attend an official function, but Mr Heatley used his ministerial expenses on other occasions.
The report also found Mr Heatley put the wine down as food and beverage which was a careless, rather than dishonest, act but said he should have taken "greater care".
The report said while the sums involved were not huge, public trust was at stake.
Rules needed to be clear and easy to follow but ministers also had a responsibility to manage spending appropriately and use their judgment.
The report did not look at Mr Heatley's use of VIP transport as ministers and their partners are entitled to use it at any time, nor did it look at Wellington accommodation payments because under a new system introduced last year a fixed sum is paid.