Prime Minister Malcolm Turnbull has announced Health Minister Sussan Ley has resigned from the front bench in the wake of travel entitlements scandal.
Senator Arthur Sinodinos will act as health minister until a replacement is found.
Ms Ley had initially stepped aside temporarily without ministerial pay after it was revealed she claimed several taxpayer-funded trips to the Gold Coast, including one trip on which she bought a $795,000 investment property.
Mr Turnbull revealed her resignation as he announced a new agency that would overhaul the compliance of parliamentarian entitlements.
"An independent parliamentary expenses authority will be a compliance, reporting and transparency body," he said.
"It will monitor and adjudicate all claims by MPs, senators and ministers, ensuring that taxpayers' funds are spent appropriately and in compliance with the rules. The body will be governed by an independent board, which will include a person experienced in auditing, in audit matters, a person with wide experience in remuneration matters, the president, for the time being, of the remuneration tribunal, a former judicial officer and a former MP.
"Specific details of this reform will be drawn up by the Special Minister of State in consultation with members and senators of both the major and smaller parties."
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Agency to offer transparency, accountability
Mr Turnbull said politicians "owe the people of Australia the greatest transparency and the greatest accountability and having this information available regularly - monthly, as I said - that will ensure, I believe, a great change in transparency and accountability".
"Australians are entitled to expect that politicians spend taxpayers' money carefully, ensuring at all times that their work expenditure represents an efficient, effective and ethical use of public resources," he said.
"We should be, as politicians, backbenchers and ministers, we should be as careful and as accountable with taxpayers' money as we possibly can be. We are dealing with other people's money."
In relation to Ms Ley, Mr Turnbull said she had "she has made a judgement that is, I believe, in the interests of the government and she has made an appropriate judgement".
"The important thing now is to ensure that for the future Australians are absolutely reassured that parliamentary expenses are - which are work expenses after all - are appropriately spent by parliamentarians and that they are - parliamentarians are promptly, transparently account ably delivering them," he said.
Mr Turnbull declined to comment on whether the proposed entitlement reforms were overdue, saying it had "always been an issue and part of the problem is that the work that politicians do is in many ways unique".
"Ultimately, these decisions have got to be the judgement of the individual member of parliament or minister," he said.
"Clearly there will be areas where people's judgement will differ, and, therefore, MPs and senators and ministers have to be responsible for their judgement.
"That's why, I believe, the combination of an independent authority and timely, monthly reporting will make a very big change."
The prime minister's proposed scheme is similar to one put in place in the UK after widespread misuse of parliamentary entitlements was uncovered.
"You can go to any member of the House of Commons and you can see what they have spent and why they spent it and so forth," he said.
"It is very easily searchable; that is what we need to do."
Mr Turnbull said the new authority would undertake work that is currently being done by the Department of Finance.
"It would also be able to provide advice to and rulings to MPs and senators," he said.
"If there is an issue that an MP or a senator is unsure about what is the appropriate course of action, they should be able to get a ruling from that authority which they can then rely on.
"What you find with these issues is often the result of mistake, it is often the result of errors of judgement, but above all, what we need to do is ensure that the Australian people are satisfied, satisfied beyond any shadow of doubt, that parliamentarians are spending their expenses appropriately."
Mr Turnbull said the new agency would provide a more up-to-date method for filing expenses as well as transparency.
"I firmly believe that putting information up there for the public, in as close to realtime as you can, is highly desirable," he said.
Other government ministers, including Mitch Fifield, George Brandis, Peter Dutton and Steve Ciobo have also recently been in the spotlight for claiming tax-payer funded trips to sporting matches and a New Year's Eve party at the prime minister's home.
Liberal Senator Arthur Sinodinos will continue to cover Ms Ley's former ministerial roles for the immediate future.
