Former Liberal leader John Hewson tells a revealing story about his parliamentary days, and the cavalier attitude of some of his then-colleagues towards the perks of office.

As federal Opposition leader in the early 1990s he made a point of taking taxis to most destinations, instead of using the chauffeur-driven Commonwealth cars that were at his disposal. And he insisted his staff do the same.

"The cost of Commonwealth cars was multiple that of standard taxi fares," he recalled this week. "I saved the taxpayer hundreds of thousands of dollars by doing that. But so many of my colleagues took me to task because they saw it might erode their benefits; they were worried someone might think this was a good idea and apply it to everybody".

It's a salutary insight into how jealously some MPs guard their privileges. And it highlights how the mentality of entitlement can so easily take root in what is still largely a self-policing system, with patchy oversight from an overstretched Finance Department.

Bronwyn Bishop's decision to take a helicopter the short distance from Melbourne to Geelong in late 2014 to attend a party fundraiser at a golf club – at a cost to the taxpayer of more than $5000 – is but the latest in a long line of controversies over politicians' perks in recent decades. Neither major party has had a monopoly on expenses scandals.

Indeed, Prime Minister Tony Abbott himself is among the MPs who've had to pay back allowances – in his case, travel claimed for a colleague's wedding and $9400 spent during a tour promoting his book, Battlelines, in 2009.

However the public backlash this time has reached a white-hot intensity.The reasons are clear enough. Not only has Bishop been a highly partisan Speaker of the Parliament but there is still deep-simmering resentment over Abbott and Joe Hockey's lifters-versus-leaners budget of 2014.

Australians want to know why – if the age of entitlement is really over as the cigar-fancying Hockey declared in February last year – it's not also over for their elected representatives in Canberra.

$170m estimated total cost

$7m dispensed for travelling allowances including $270 each night in Canberra on sitting days

$32m spent in office refurbishments

$507,338 the PM’s salary, the third-most generous in the world according to The Economist

$336,599.25 the salary of cabinet ministers

$360,990 the salary of the Opposition leader

$195,130 the salary of a backbencher

Up to $46,000 the value of an MP’s electorate allowance

15.4% the value of an MP’s salary paid into superannuation, 70 per cent more than the average Australian’s

$300 minimum value of gifts that must be declared

The bill is a hefty one. In addition to salaries, the Department of Finance says nearly $170 million will be set aside this year for MP entitlements (which include generous away from home travel allowances, unlimited business class airfares on official business, a private car and car with driver for official business).

Hewson says "you would like to think that elected representatives would set themselves [reasonable] standards on these things and hold themselves accountable. But unfortunately, in many cases, that doesn't apply. People do see it as an opportunity to exact as much cash as they can, under whatever circumstances."

Independent Senator Nick Xenophon​ says the level of outrage over Bishop and "choppergate" has reached a "tipping point", exacerbated by further revelations over Bishop's hefty spending on limousines and a staff-accompanied trip to Europe at a cost of nearly $90,000.

"People are stopping me on the street to talk about it," he says. "Bronwyn Bishop has created a perfect storm. You could say it is a case of h-squared: a helicopter ride combined with hubris. And the fact that she was only prepared to apologise for distracting the public from the shortcomings of Bill Shorten made things worse".

Xenophon (who says he prefers flying economy to business) wants to circulate legislative amendments next month proposing a new parliamentary entitlements adjudicator, to receive complaints and rule on the validity of claims. And he says "inappropriate" claims should be paid back by the offending MP with a 100 per cent penalty [of the amount owed] rather than the current 25 per cent.

He also wants MPs' claims logged monthly, rather than six-monthly, with a two- to three-line explanation in each case rather than vague generic descriptions that muddy the purpose of travel.

For instance, in 2011-12, Bishop's expense reports show several large bills for car transport classified as "taxi", with no other identifying details attached. Only after a freedom-of-information request was Fairfax Media able to establish these were actually chauffeured cars in Sydney provided by Royale Limousines.

Acting Greens leader Larissa Waters says her party would like to see the establishment of a federal Independent Commission Against Corruption which would include an "independent parliamentary adviser".

"I would like this to be the last time that we have a high-profile shambles around parliamentary entitlements," she says. "Let's use this as an opportunity to make sure that this does not happen again".

Billionaire MP Clive Palmer claims that he is among the least costly MPs in Parliament and always pays for his own travel. But he thinks the system needs overhauling, not necessarily because of the sums involved in perks abuse – which he says are often relatively trivial – but because of the damage done to the country's image.

"It's not good for Australia if we constantly pull people down over relatively small items," he says. He wants a return of the system which was in force for the first 50 years of the Commonwealth: MPs travel being booked exclusively by bureaucrats, removing the discretion for parliamentarians to decide what's in and out of order.

Not everyone thinks the system is broken. Gary Gray, former special minister of state under Julia Gillard and Labor's current shadow in that role, says there has already been a significant tightening of the rules over the years (with cutbacks on MPs' super and first class travel overseas being two key target areas).

Ahead of the ALP national conference in Melbourne this weekend, Gray has written to all Labor MPs in attendance, reminding them of what is "appropriate use of Commonwealth money".

He is still consulted on the quiet by colleagues on both sides of the house when they have doubts about their rights to a particular entitlement. But he contends there is enough transparency in the current system to keep parliamentarians on their toes.

"I do not support what Bronwyn did, but I think the system worked in that it was made public, and she has paid a terrible political price," he says.

"This has been made public as a consequence of expense management reports being published, and then scrutinised and exposed."

Gray says that as the responsible minister under Gillard, he instituted spot audits whereby a parliamentarian's bills would be "audited randomly once every Parliament … a lot of the members and senators are not entirely aware of the integrity measures that are in place and how they work."

He was also a key player in a secret meeting in 1997 which ultimately led towards what became known as the Minchin protocols on settling disputes over MPs' expenses.

In late 1997, Gray – then Labor's national secretary – convened a meeting at his Canberra home along with Andrew Robb (then federal Liberal secretary), Labor senator Robert Ray and Liberal minister Nick Minchin to discuss a ceasefire after a particularly torrid run of expenses scandals, which had culminated in the suicide attempt of ALP senator Nick Sherry, under fire for claiming overnight allowances while staying at his mother's house outside Hobart.

"We all knew that we had gone too far," says Gray. "The allegations were getting quite ridiculous … the whole idea of politicians being able to travel to their work was coming under question. We agreed to stop using entitlements as part of the general warfare in political parties, except where there was clear and genuine abuse."

The Minchin protocols also led to Nick Minchin instituting active pushback by the Department of Finance against questionable claims – and the ability for disputes to be quietly resolved between the administering bureaucrats and parliamentarians.

But many loopholes remain. Several MPs told the Herald this week – with remarkable frankness off-the-record – that they tack brief doorstop interviews, photo opportunities and short speeches on to trips to the football or family events to make them pass muster.

Abbott made no secret of that fact that the system is easily gamed when he told a Liberal party-room meeting last year that he scheduled a tour of a Melbourne cancer research centre on Tuesday morning so he could justify being in town for a fundraiser the night before.

A recent report of the Australian National Audit Office labelled the parliamentary entitlements regime as "difficult to understand and manage" because of overlapping and complex legislation, guidelines, and conventions, and lack of "shared understanding" of key terms such as "parliamentary business", "electorate business" and "official business".

A number of MPs are said to have paid off Canberra mortgages with the assistance of generous overnight travel allowances. Hockey (quite legally) pays his as rent on a valuable property his wife owns in Canberra.

John Wanna, professor of political science at the Australian National University, says the system is "effectively an honesty system for parliamentarians – if they want to stay within the rules, they do, but there is ample opportunity to bend them".

Betty Collins, a former secretary of the Commonwealth Remuneration Tribunal who served under three PMs in the 1990s, has also seen many attempts to game the system.

She says bureaucrats have a long history of providing guidance and that there are many resources available to MPs who want to do the right thing.

"It's very hard to see why they can't get their entitlements right," she says. "But because MPs are MPs, [guidelines] are quickly overrun. They have a tendency to lose sight of the purpose and think, 'I have an entitlement', and they start to think just about anything they do is claimable."

Labor front bencher Joel Fitzgibbon says there is anger all around the parliament at Bishop's actions because she has "portrayed a pretty good system as one that is open to corruption. But I simply don't believe it is.

"Anyone that wants to rort the system surely knows they take a huge risk which can be career-ending. Why would you put your career on the line for a few hundred dollars here or there? Very few would be that stupid … in Bronwyn's case, it's delusions of grandeur causing the bad judgment."

It is not clear if the Department of Finance picked up on Bishop's extravagant chopper ride before the media exposed it. Her office batted away all further questions this week, saying that with the Finance Department now formally investigating, it would be inappropriate to comment.

A spokesman for Special Minister of State Michael Ronaldson​ claimed the MP entitlements system is "now stronger than at any previous stage since its establishment".

He said the government is also examining other proposals, including that MPs' claims be scrutinised by an external auditor.

But the government also wants to broaden the purposes for which MPs can legitimately claim travel expenses with the inclusion of a new "generic" category of approved travel for "business as an elected representative" – a move Collins thinks might only encourage MPs to find new purposes for travel.

A 2013 report for the International Parliamentary Standards Association found that Australian backbenchers (who take home just under $200,000 a year before allowances), were the second-best remunerated in the world, behind only Italy.

"The acid test for me is, if they left politics would they earn more money?" says Wanna, acidly. "We've never had a vacant seat in Parliament …"

with Fergus Hunter