Reuters International

Sussan Ley, Australia's Minister for Sport, speaks during a media conference in Sydney, Australia, July 25, 2016. REUTERS/David Gray

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By Colin Packham

SYDNEY (Reuters) - Australian Health Minister Sussan Ley said on Friday she had resigned from her Cabinet position amid an expenses scandal that has proved to be an embarrassing start to the year for embattled Prime Minister Malcolm Turnbull.

Her resignation will force a reshuffle on Turnbull, the first since he took power in 2015. A Newspoll on Monday found Turnbull and opposition leader Bill Shorten to be Australia's most unpopular pair of political leaders in 20 years.

Keen to temper the political fall-out from Ley's Cabinet resignation, Turnbull said his government would set up an independent body to monitor and adjudicate on expense claims by members of Australia's parliament.

"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," Turnbull told reporters in Sydney.

Turnbull already faces a tough year ahead, with a fractious upper house Senate frustrating his legislative agenda, mainly focused on spending cuts and tax reforms meant to balance the national budget, after an unconvincing election win last year.

He is also facing growing discontent within his own party, with resentment still simmering after he toppled previous leader Tony Abbott in a party-room coup in 2015.

Ley is a high-profile casualty of a scandal that is engulfing Turnbull's conservative government amid growing revelations that several Cabinet ministers had claimed expenses for trips that had coincided with personal activities.

Ley, who is also the minister for aged care and sport, had been fighting calls for her to resign after it was revealed she had made expense claims for several visits to the Gold Coast, a holiday destination in Queensland state, including one when she said she purchased an investment property on impulse.

She said in an emailed statement she believed she did not break any rules by claiming expenses for the trips but had decided to resign after embarrassing the government.

"I accept community annoyance, even anger, with politicians' entitlements and it demands a response," Ley said.

The end came for Ley after fresh revelations showed she had charged taxpayers A$13,000 (8,000 pounds) over the past two years to fly private planes, even though commercial flights were available, in order to keep up her flying hours and maintain her pilot's licence.

The expenses scandal has since drawn in another Cabinet member, innovation minister Greg Hunt, who has claimed A$20,000 in expenses for trips to luxury resorts with his family over the past 10 years.

Australia's political expense system allows ministers to claim the cost of travel for their spouse if it is in Australia and for official purposes, although critics question the legitimacy of the trips.

(Reporting by Colin Packham; Editing by Paul Tait)

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