Opposition MPs have slammed the Prime Minister's handling of the Pansy Wong scandal, but there has been support for his move to end international travel allowances.

John Key yesterday asked Speaker Lockwood Smith to get rid of the allowance, which he said had "outlived its usefulness" and undermined public confidence in Parliament, following MP Pansy Wong 's resignation from cabinet on Friday over her husband's use of her air-travel rebate.

Labour Leader Phil Goff told Radio New Zealand this morning Mr Key had been forced to make the call as a result of the Pansy Wong affair.

"I think it is an acknowledgement by John Key that he did not handle this matter well when he abused the opposition for legitimately raising questions about it."

The Green Party's Metiria Turei said the Prime Minister had not gone far enough, calling for an independent review of all MPs' expenses and allowances.

"I think it is a weak response," she told Radio New Zealand. "We've had this issue around international travel, we've had issues around housing, we keep taking bits out to change but the whole system needs to be reviewed and cleaned up."

Mr Key said he had advised Mrs Wong not to answer any questions from the media until after the release of the Parliamentary Services report into the Wongs' use of the rebates and she had all the facts available to her.

"There is a process and that process is a fair and rational one, that is to get the facts and then have the discussion," he told Radio New Zealand.

He said he not told his other MPs to check whether their travel allowances had been used correctly.

"I make it clear to my MPs that I expect each of them to follow the rules. If you look at Pansy Wong, we know that her husband has incorrectly used her travel, and Pansy Wong has paid a very high price for that. She is no longer a Minister, she is no longer a member of the executive."

The end of the allowance will likely result in a pay rise for MPs.

Mr Key yesterday said he expected any rise to be "very modest" and putting salaries up by the full $9800 value of the perk was "unacceptable to me".

A significant increase would only expose MPs to more criticism, even though they had no say in their pay, he said.

Mr Key has urged the Speaker to ask the Remuneration Authority to decide how to abolish the perk and whether changes should be made to salaries as a result.

Phil Goff agreed with Mr Key's request for the perk to be reviewed independently, but said it was essential to retain some entitlement to international travel to allow MPs to go overseas on parliamentary business.

He had used his rebate for his recent trip to Australia to meet Prime Minister Julia Gillard and senior Cabinet ministers. "That enables me to do my job properly and is a legitimate use. Trying to justify the use of it for holidays will never be regarded by the public as a legitimate use."

However, the independent Remuneration Authority has previously dealt with abolished allowances by cashing them in in their entirety and topping up MPs' salaries.

In 2003, it added $18,300 to the base salary rate to make up for the loss of three allowances.

Dr Smith has previously warned that if the perk were abolished, taxpayers might have to pay more in increased salaries than it cost. He is expected to respond to Mr Key's request tomorrow.

The PM stopped short of asking for the discounts for former MPs to be cut, saying it was unfair to retrospectively alter the rules.

However, he signalled that he would seek to place all MPs' pay and entitlements into the hands of an independent body after a Law Commission report on the matter is finished. That follows calls by the Green Party, Labour and Act for such a review.

The review was recommended following an examination of MPs' entitlements done in June by former Speaker Sir Doug Kidd.

Yesterday, he said involving an independent body would end the incentive for MPs to leverage what they could from their entitlements.

Metiria Turei supported an independent body setting entitlements.

Act leader Rodney Hide said he agreed with the Prime Minister that the perk should go and although it was for the Remuneration Authority to decide on salary increases in lieu of the perk, "you'd hope they'd be a wee bit judicious".

He disputed Mr Goff's call for some provision for work travel, saying there was already enough discretionary funding for it in party leaders' budgets - a bulk sum they get to run their offices.

The Remuneration Authority sets MPs' salaries by taking account of criteria including pay increases for comparable public sector jobs. One of its objectives is ensuring MPs' salaries are high enough to attract good candidates.

Politicians have had the rebates on foreign travel since 1972, and since 2003 the Remuneration Authority has specifically included them in its calculations of MPs' salary packages.


Annual totals for international travel perks for existing MPs:

1992-93 - $263,567

1995-96 - $387,950

2008-09 - $600,000

2009-10 - $432,989