Bronwyn Bishop resigned as Speaker this afternoon following a string of revelations suggesting systemic abuse of taxpayer-funded travel entitlements.
Prime Minister Tony Abbott called a snap media conference on Sunday afternoon to announce the Speaker's resignation and a major review into MPs' entitlements but repeatedly declined to criticise his long-time "friend and colleague" over her grandiose use of travel perks.
"Today Ms Bishop called me to let me know that she would be resigning," Mr Abbott said told reporters in Sydney.
Speaker Bronwyn Bishop has been engulfed in an expenses scandal.
Speaker Bronwyn Bishop has been engulfed in an expenses scandal. Photo: James Brickwood
"This has obviously been a very difficult day for Bronwyn Bishop…I think we should respect the fact that it's been a very difficult day for her," he said.
"Bronwyn's resignation today will help to restore public respect," he said.
Ms Bishop issued a statement on Sunday and said she had written to the Governor-General and tendered her resignation and her "love" for the parliament had driven her decision.
"I have not taken this decision lightly, however it is because of my love and respect for the institution of the Parliament and the Australian people that I have resigned as Speaker," she said.
"I look forward to continuing to serve the people of Mackellar as their local member."
Mr Abbott insisted the problem was the system of MPs' entitlements and not the users and announced a "wide ranging" review into the scheme to be headed by former Finance Secretary David Tune and the Chair of the Remuneration Tribunal John Conde.
The prime minister has taken more than two weeks to act on the ongoing saga and said voters should thank him for his decision.
"I think we should also be grateful that something has been done here that will resolve this vexed question of entitlements, as far is humanly possible once and for all," he said.
Labor has been demanding the Speaker's resignation over revelations she hired a $5000 private helicopter to travel from Melbourne to Geelong for a Liberal fundraiser.
Mrs Bishop initially refused to apologise although agreed to repay the money. Last week she issued a grovelling apology, which Labor rejected as hollow.
Mr Abbott refused to criticise his long-time friend, saying the system had let her and other MPs down.
"Obviously Bronwyn Bishop is a friend of mine, I have a great deal of personal respect for Bronwyn Bishop," he said.
"Without wanting to underplay the significance of some of the errors of judgement which she herself has conceded and apologised for, I think she's certainly done the right thing," he said.
"What has become apparent is that the problem is not any particular individual, the problem is the entitlements system more generally
"We have a situation where spending is arguably inside the rules but plainly outside community expectations."
Opposition Leader Bill Shorten said the Speaker's resignation was "overdue" and the prime minister's continued defense showed the government was "unrepentant".
"Unfortunately Tony Abbott still won't accept that Bronwyn Bishop has done anything wrong," Mr Shorten said.
"Mr Abbott has blamed the system, but it was Mrs Bishop's addiction to privilege that was the real culprit" he said.
"Mrs Bishop hasn't resigned because it was the right thing to do, it was because she and Mr Abbott realised they had no other choice."
