Phil Heatley

Wellington, Feb 26 NZPA - Shamed former minister Phil Heatley was warned repeatedly about his ministerial credit card spending which led to his resignation from Cabinet.

The Dominion-Post reported today that in July and September last year, Mr Heatley was told by a Ministerial Services manager: "Due to the scrutiny that credit cards attract we would like to remind you that all records are open to review and should comply with the five expenditure principles ... of the Ministerial Office handbook."

The principles included that spending was for official ministerial purposes only, spending had to be properly documented, able to withstand audit scrutiny and comply with department delegations. They must also be "reasonable for the circumstances and able to withstand taxpayers' scrutiny".

A distraught Mr Heatley yesterday resigned his housing and fisheries portfolios because he had wrongly spent money on his ministerial credit card and signed a claim for a dinner when in fact the $70 was the charge for bottles of wine.

He has paid the money back and has explained he didn't properly study the rules covering ministerial credit cards.

It was the claim for dinner that caused him to decide to resign his portfolios despite earlier controversy over his spending which included taking his family on a trip.

Yesterday Mr Key revealed he had urged Mr Heatley to stay on but be stood down while the Auditor-General investigated his expenses.

He queried why Mr Heatley's behaviour was not picked up on.

"Why didn't alarm bells go off when there were repeated examples of people using credit cards and having to repay it, not unique to Mr Heatley and certainly not unique to the National Government?"

Mr Key said Ministerial Services were dealing with far more transparency than ever before.

"I'd say the standards my ministers are being held to are dramatically higher than what they were just a few years ago and that's a function of the transparency environment.'

Meanwhile questions are being raised about why Mr Heatley resigned when the PM was happy with a stand down period.

Mr Heatley will remain on the backbench as MP for Whangarei.

National's Whangarei electorate chairman, Murray Broadbelt, told NZPA Mr Heatley was a popular and hard working MP.

"It's very disappointing and sad that Phil has decided to resign his cabinet portfolios over what appears to be a technical issue over how he reported an expense," Mr Broadbelt said.

"I think the people of Whangarei accepted his apology earlier in the week but then he's decided off his own bat last night to offer his resignation."

Labour leader Annette King thought it was strange that Mr Heatley resigned when the PM would have been comfortable with a stand-down.

"It is a holy mystery to most of us...there needs to be an explanation. None of us know what is behind it," she told reporters.

"Is there more to it? It just seems strange and a mystery as to why a minister would stand down when his prime minister said he didn't need to." Mr Key left the door to Mr Heatley returning to Cabinet open saying it would depend on the audit report.

Mr Heatley said he resigned because he had not met his own standards. Mr Key said Mr Heatley's actions were untidy and careless but he didn't think there had been any intentional wrongdoing.

Earlier, this week Mr Heatley paid back just over $1000, most of which was spent on a family trip to the South Island where he attended a conference.

Maurice Williamson has taken over Mr Heatley's housing portfolio and David Carter fisheries. Both are temporary appointments.