Speaker Telmo Languiller resigned on Saturday. Credit:Stefan Postles Cabinet conceded the current system lacks rigour and scrutiny, with an independent adviser for entitlements being considered to regulate and offer advice on expenses. The second residence entitlement, which the Labor pair claimed, would also be restricted to those who actually represent country seats – a move that has bipartisan support – under the changes. Transparency is also set to be improved, with claims to be published online. The cabinet discussions come as Labor works to avoid distracting and expensive byelections in either of the western suburbs seats held by the fallen speaker or his deputy amid concerns about a backlash which might benefit One Nation.

MP for Melton Don Nardella has been kicked out of the Labor caucus Credit:Darrian Traynor Premier Daniel Andrews on Sunday said he had received undertakings that both men would serve out their terms until the election in November 2018. The claims of both men will be examined by Parliament's audit committee, including an examination of Mr Languiller's vehicle logs. Telmo Languiller has agreed to repay about $40,000 he had claimed for living in Queenscliff while representing Tarneit. Asked on Sunday whether Mr Languiller and Mr Nardella should resign from Parliament, Premier Daniel Andrews said: "And what, and cost taxpayer hundreds of thousands of dollars in terms of byelections?"

"That's entirely a matter for them but they've both committed to me … that they intend to serve out their term ... and that they intend to work hard for their local areas." The fact that both embattled MPs represent the west has also angered some Labor figures who fear the region is vulnerable to becoming an area of swing seats as Western Sydney has. The revelations of the country allowance claims follows a widespread community backlash against a planned new youth prison in Werribee. Mr Languiller, who represents the electorate of Tarneit, claimed almost $40,000 to live in Queenscliff, while Mr Nardella, in neighbouring Melton, claimed as much as $113,000 extra over almost three years to live in Ocean Grove. Mr Nardella has given no indication he will pay back the money, providing a continuing headache for the Premier and ammunition for Matthew Guy's opposition.

Neither MP returned calls on Monday. Caucus is furious at the behaviour, with some also hitting out over the Premier's office handling of the scandal. Others lament that the government continues to lurch from crisis to crisis. "There's only so much damage the brand and the leader can sustain," one senior source said. Mr Guy also upped the pressure on the Premier to come down hard on Mr Nardella, who is refusing to repay the money he claimed, pointing that as opposition leader Andrews had vigorously pursued Liberal-turned-independent MP Geoff Shaw in the past parliament.

"Daniel Andrews stated that Geoff Shaw, for a matter of $1800, should be expelled from the parliament, expelled from the Liberal Party, he should be censured in the parliament, he should go to the police, go to the ombudsman, go to the IBAC, well all of that applies to Don Nardella," Mr Guy said. "They should be booted out of the Labor Party, possibly booted out of parliament on Daniel Andrews' own analysis, what's different?" On Monday Mr Shaw told that both Mr Languiller and Mr Nardella had acted within the rules, saying he did not believe they should have been made to relinquish their positions by claiming money to live outside their electorates. "They are within the rules – let the voters decide if they want someone who lives that far away from the electorate to represent them."

A senior Labor source said Mr Languiller deserved credit for quickly promising to repay the money and reaching the conclusion that his position as speaker was untenable. Loading Last week Treasurer Tim Pallas dismissed the need for reform, claiming politicians should be guided by "common sense". "Quite frankly, there's always a way around rules," Mr Pallas said. "But there is no way around holding yourself to account to good conduct and the public expectation."