'All MPs' may be targeted in credit card inquiry

The fallout from former Cabinet minister Phil Heatley's credit card spending scandal may see all ministers' expenses examined.

Auditor-General Lyn Provost is considering whether to broaden an inquiry into former Cabinet minister Phil Heatley's use of his ministerial credit card to include spending by all ministers.

A spokeswoman for Ms Provost told the Dominion Post yesterday that she was still deciding the terms of reference for the inquiry into Mr Heatley's spending, including whether it should focus on him alone.

"We're considering the scope."

The terms of reference are expected next week.

Meanwhile Prime Minister John Key says he will not prejudge an investigation into Mr Heatley after it emerged he had been warned about misusing his taxpayer funded credit card.

Mr Heatley resigned on Thursday as minister for housing and fisheries because he had inappropriately spent money on his ministerial credit card and signed a claim for a dinner when he actually spent $70 spent on two bottles of wine at a National Party dinner.

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

It was the claim for dinner that led to his decision to resign his portfolios despite earlier controversy over his spending which included taking his family on a trip to the South Island.

A Department of Internal Affairs letter dated September 8 told Mr Heatley he had not provided all receipts required.

It adds: "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 in clause 3.1 of the Ministerial Office Handbook."

Cards are only meant to be used for ministerial purposes and have to be properly documented.

The Ministerial Services manager then suggested Mr Heatley call her if he needed anything clarified.

The spending on Mr Heatley's card markedly dropped off after that letter. Previously he used it to pay for personal expenses and then paid them back, but that was against the rules.

Earlier, on March 11, one of Mr Heatley's staff wrote to Ministerial Services to explain the reason family tickets on the ferry to the South Island were put on the card. The staff member said the card was used to secure cheap fares because the Interislander's computer was down and because of Mr Heatley's travel warrant.

Mr Heatley took his family on a work trip and paid for fares and meals on the card. He paid back the $1000 spent this week.

On Thursday Mr Key questioned why Mr Heatley's bad spending habits were not picked up by Ministerial Services, but now it appears they were.

Mr Heatley's spending habits markedly improved after the letter with only a $69.95 wallet included with legitimate spending on luggage in November. He paid that back.

Asked today about the warnings and whether Mr Heatley abused the system, Mr Key said: "There's no point in me prejudging that. The whole purpose of getting the Auditor-General in is to get a considered opinion on all his expenditure. If I was to embark on my own commentary of that, that would be unhelpful to the process. The Auditor-General is the best person to get in there and look at the whole thing".

It was a fact that Mr Heatley had signed a document that was incorrect, but a mistake like that was not a sacking offence, Mr Key said.

"In the case of Mr Heatley, he actually chose to resign. I would be more than happy for him to step aside while the Auditor-General came through and had a look. Ministers will make mistakes, if the paperwork isn't absolutely perfect that's not a reason for a minister to go specifically. What Mr Heatley decided was the right course of action."

Mr Key said there was no need for the Auditor-General to go through all ministers' accounts.

Labour has questioned why Mr Heatley resigned when Mr Key was happy with a stand down period.

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

- NZPA