By Sean Nicholls and Linton Besser
KRISTINA KENEALLY'S premiership has hit crisis point after the resignation of two ministers within hours, throwing her government into chaos two weeks before the Penrith byelection and four days before the budget.
After days of publicly defending her minister for state development, Ian Macdonald, against charges he had used taxpayers' money to fund an overseas trip, Ms Keneally cut him loose yesterday, making him the 12th minister to go of the 22 who were sworn in after the 2007 election.
At a news conference last night, Ms Keneally announced Mr Macdonald resigned after admitting "errors made in his travel arrangements for the trip he took to Dubai in 2008".
"The minister assured me everything was in order," she said. "The minister today admitted there were errors made."
Under fire ... NSW Premier Kristina Keneally faces a barrage of questions from the press yesterday afternoon.Credit: Dallas Kilponen
She said Mr Macdonald "has apologised unreservedly", despite him not appearing at the news conference.
However, she refused to release the details of the errors, including whether they were travel or accommodation costs or the amounts involved, before the completion of an internal government review of Mr Macdonald's trip that was ordered on Wednesday. She promised to release the review when it is completed in about a week.
Ms Keneally said she did not rule out a complete review of Mr Macdonald's expenses history during his time as a minister.
The Herald had exposed $30,000 worth of business-class upgrades Mr Macdonald accepted in 2008 on a trip to Rome and Dubai with his wife and two friends, and not declared on his pecuniary interest register.
Ian Macdonald ... dumped for misleading Premier.Credit: Jon Reid
But he had been unable to explain why a $2815.50 economy flight had been charged back to the taxpayer when he had told the Premier he had paid for it himself.
Yesterday Mr Macdonald and Ms Keneally had refused to explain the anomaly, choosing instead to hide behind the review of Mr Macdonald's trip.
Only hours earlier, Ms Keneally had suffered a sharp rebuke from her close friend, the juvenile justice minister, Graham West, who resigned amid revelations that he had learnt a tender for a juvenile justice program had been cancelled by the Department of Commerce without his knowledge two weeks ago.
His timing is being read as a deliberately hostile act, after cabinet last month rejected the recommendations of a landmark report he commissioned into juvenile justice.
Mr Macdonald's flight upgrades had been provided by Emirates Airlines. Only months before, the airline's owners, who have significant commercial interests in horse breeding in the Hunter Valley, had benefited from a crucial decision to allow horse breeding to continue in the area after the outbreak of equine influenza. He had provided conflicting stories to the Herald under questioning – first that the Rome leg of his trip was a private holiday, and second that he had held government meetings while in Italy.
But Mr Macdonald had maintained that whatever meetings he held, he had paid for his economy-class fare.
Ms Keneally told reporters on Wednesday: "I am advised that in fact the minister paid for this trip out of his own pocket."
Mr West, the member for Campbelltown, has enjoyed a long friendship with Ms Keneally. They met as volunteers at St Vincent de Paul before their election to Parliament.
But Mr West gave the Premier almost no warning of his decision, phoning her yesterday morning just before announcing his decision to Parliament.
He said that Ms Keneally was "shocked" at his timing.
Last month, Mr West was openly upset that cabinet rejected a radical plan to overhaul the laws and policy regarding young offenders.
The review recommended the $350million needed for new juvenile detention centres be diverted to programs tackling the underlying causes of crime, including drug or alcohol abuse.
"I'm looking forward to being able to talk on these issues outside the constraints of, not only cabinet, but also of Parliament," he told the Herald yesterday. "I'd like to be able to do that once again."
Ms Keneally said she would not appoint a new minister to take on Mr Macdonald's portfolios. Instead she has given the major events portfolio to the Gaming and Racing Minister, Kevin Greene, state and regional development to the Treasurer, Eric Roozendaal, and juvenile justice to the Local Government Minister, Barbara Perry.