Finance minister says he booked private travel three times by phoning CEO Andrew Burnes, who is a Liberal donor and party treasurer

Mathias Cormann has revealed he booked private travel on three occasions by ringing up the chief executive of a major travel company run by a Liberal donor and a personal friend, but denies the travel was a gift, or provided to him at a discount.

The finance minister faced hours of questioning in Senate estimates after it was reported that flights for a family holiday to Singapore were paid for by a travel company which is the recipient of a major government contract. The company, Helloworld, is controlled by the Liberal party treasurer, Andrew Burnes.

Cormann also revealed that Burnes complained to him privately about the conduct of the tender for the travel contract, but the finance minister told the hearing on Tuesday he had not passed those complaints on to bureaucrats, and played no role in determining the successful bidder.

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He said he played no direct role in procurement as a matter of routine, but said given the “circumstances”, meaning his personal relationship with Burnes, he was “extremely cautious” in relation to the contract.

The secretary of the finance department, Rosemary Huxtable, told the hearing Burnes had also contacted her to raise concerns about a “robust process” in relation to the travel contract, which the company ultimately secured in July 2017, but he did not make an official complaint to the department. She said Cormann had not spoken to her about Burnes’s criticisms.

Pressed on the unusual practice of ringing the chief executive of a major travel company to book a family holiday, rather than ringing, as the Labor senator Jenny McAllister suggested, “a 1800 number”, Cormann told the hearing: “I’ve got a close personal relationship with Mr Burnes, and I don’t think that it is unusual to ask somebody who owns a business to sell products and services to you on commercial terms.”

Cormann rejected an observation from Labor’s Senate leader, Penny Wong, that it was “not a great look” when a party donor won a lucrative government contract.

The finance minister told the hearing companies should not be excluded from government tenders if their executives “participated in the democratic process” – meaning made political donations – or had a personal friendship with the portfolio minister, provided probity controls were in place, because otherwise taxpayers might not get value for money.

Cormann said Labor had granted the same company a government travel contract.

The controversy began when Fairfax Media reported on Tuesday Cormann had not paid for family travel to Singapore booked on 17 July 2017, worth $2,780, until he was alerted to the issue by the newspaper.

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Cormann said he failed to notice that he hadn’t paid the bill, citing a lot of travel-related activity on his credit card. He said the company had not sent him a “reminder notice”.

The finance minister issued a statement saying he had “absolutely no involvement” in awarding the government contract to Helloworld. The Department of Finance awarded the travel contract to the AOT Group, which includes Helloworld, on 28 July 2017. The initial phase of the contract, which runs for a term of up to six years, is worth $21m.

Burnes has a substantial political network, and made a number of personal donations to Liberal MPs. The company had donated more than $500,000 to the Liberal party.

The finance minister said the holiday booking through Helloworld was made on “commercial terms and should have been charged to my credit card straight away as instructed by me at the time”.

“That is what I genuinely thought had happened,” Cormann said. “At no point, until approached by the media [on Monday], did I receive any reminders that the payment due remained outstanding, even though I now understand it appeared as outstanding and unresolved on the internal Helloworld system since that time.

“The payment was processed immediately once it became apparent to me that it remained outstanding.”

Cormann also tabled a letter to him from Helloworld’s chief financial officer Michael Burnett characterising the lack of payment as a “regrettable” administrative error.

“Because we held your credit cards at the time of booking, payment reminders were not sent to you, even though the amount remained listed as outstanding on our internal system,” Burnett said.

“We have now processed payment of the full outstanding amount of $2,780.82 from the credit card previously supplied to us. The flights were never free and they were never intended to be free.

“We apologise for any inconvenience or embarrassment this administrative error may have caused.”

The prime minister was asked about the travel during a radio interview on Tuesday morning, and said the finance minister was unaware he hadn’t settled the account. “That is the statement that he has made.

“He had nothing to do with the issuing with the contract, that had been issued prior and ministers are not involved with those decisions, there is a big separation administratively, the suggestion the two are linked would be complete rubbish,” Morrison said.

“There was an oversight which has been identified and he has fixed it up – I mean, what more can he do? He didn’t take free tickets in the first place ... they were going to bill him and he didn’t get billed and that was drawn to his attention, he paid the bill.”